SA’s unseen tipping point fast approaching – just like Brexit, Trump

By Alec Hogg.LONDON – There is little mystery about what has happened since Jacob Zuma took over as the President of South Africa. Each new disclosure simply reinforces a reality of plunder of State resources with new pieces of proof regularly added to this picture..___STEADY_PAYWALL___.Where some mystery does still lie, though, is in what happens next. Does the centre hold and the young democracy prevail, or is the corruption rot so deep that a Zimbabwean disaster is unavoidable?.I was exposed to both sides of this debate at a high level lunch in the City of London on Friday. It was ostensibly a gathering of heavy hitters (a Lord and a Sir were in attendance) organised by far sighted souls wanting to create a body to facilitate more UK investment into SA..Chatham House Rules prevailed, so no names, no pack drill..But the dominant view was one where Zuma will continue to misrule; money will keep leaving the country (after a net R45bn went last year); and the credit downgrade to junk is inevitable – in this respect a big week with analysts from S&P, Fitch and Moody's currently in the country..The most rational advice offered by this school was the facilitators find a group of the most "acceptable" Zuma-allied tenderpreneurs for UK investors to strike deals with..Leaving aside the morality, the advice to investors would be to treat it as a high risk bet – don't risk too much and be sure payback time is rapid. At the risk of allowing an optimistic nature to cloud judgement, my assessment is somewhat different. Here's why..Every major change through history happened very gradually and then suddenly. During the stage when momentum is building it is hard to see what is coming. But once the wave reaches Malcolm Gladwell's famous "tipping point" the consequences are always surprising..Stock market crashes are the obvious example, but so was the bursting of the US residential property bubble inducing the Great Financial Crisis..More recently, Brexit was decades in the making, with the anti-European sentiment fed by real and imagined sins blamed on Brussels. Canny observers reckon Italy and France have been on a similar path so will be next to follow the Brits out of the EU. Not surprisingly the Eurocrats are desperate to reverse the momentum hence intent on forcing a "hard" Brexit on Theresa May's UK Government..You can see the same process in Donald Trump's election in the US. Over many years, Middle America saw their jobs get exported and migrants (many illegal) come into their towns. They also stood helplessly as the greed by perceived elites crashed the financial system – only for the perpetrators to be bailed out by taxpayers..The markets, popular opinion and media pundits got Brexit and Trump wrong. They never saw the Arab Spring coming either. And from what I saw in the City last week, many are similarly blinkered to the reality of South Africa where anti-Zuma momentum is irresistible..It's notable that in SA right now, ratings agencies are spreading their net to include interviewing religious and civic society leaders. The agencies are looking for excuses to NOT trigger the downgrade. Which is a very good thing..My suggestion to one who asked was to argue the centre has held – that the Public Protector's report elicited the right kind of support from society and that the independence of the media has proven to have been a very potent supporter of democracy. Also, that a downgrade would be used as a weapon by those who want to subvert and replace SA's democratic processes..But there's a more practical aspect..Eskom was easily the biggest prize available to Zuma and his crony capitalist partners the Guptas..They moved on it in 2015 when their new appointee as Public Enterprises Minister, Lynne Brown, cleared out the entire 14-person board barring one Chwayita Mabude. They were replaced with an assortment that included Gupta mothership director Mark Pamensky, and, strangely, three young women of Indian descent..Since we drew attention to this on Biznews in March, those bizarre appointees Ms Cassim (33), Ms Carrim (34) and Ms Naidoo (42) have quietly left the board..Carrim and Naidoo resigned on the same day in July – the former is married into the family of Gupta associate Salim Essa; the latter to a "financier" intimately involved in the stinky Gupta purchase of the Optimum Coal mine. Cassim used to work for Gupta-owned Sahara Computers. Also gone from the directorate is former broadcaster Romeo Khumalo, one of Essa's business partners..After this month's resignation of CEO Brian Molefe who was followed shortly by Pamensky, Eskom is down to just seven directors, none of whom are obviously connected to the Guptas. This shows something is happening behind the scenes. As does evidence being led in various court cases involving one-time Gupta confidantes..The momentum is growing. The tipping point is near.

SA’s unseen tipping point fast approaching – just like Brexit, Trump

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