While Namibia drilled its way towards an oil boom, South Africa produced court cases. Economist Iraj Abedian told Alec Hogg that the research needed to change that was finished years ago. He revealed the plan he drew up as a ministerial adviser to turn the Northern Cape into a petrochemical hub, and warned why gas under the Orange Basin may not wait for South Africa to make up its mind. He also took on the ANC's slide to around 31%, whether its leaders would ever vote for an early election, the personal feud stalling Joburg's coalition, and the single habit he said linked the ANC's decline to Donald Trump's midterm hiding..Listen here.Edited transcript of the interview.Alec Hogg (00:03): Three stories this week, all connected. Next door, Namibia is drilling its way to an oil boom in the Orange Basin. On our side of the basin, we've mostly produced court cases. And yesterday we got the final confirmation that the ANC has fallen to about 31% of the national vote. Its secretary-general has already said that the party's leaders will be judged by this result.Then over in America, voters handed Donald Trump a midterm rebuke. Oil, the ANC, Washington: who better to connect the dots for us than an economist who grew up in one of the world's great oil states and has spent a lifetime looking at South Africa and its politics. Dr Iraj Abedian, we've got to start with what's going on in the political landscape.I've just had a conversation with Herman Mashaba, who tells me this. He says, and he was measured, he wasn't angry, they will definitely not support the DA if the DA has Helen Zille as the mayoral candidate. And he says the reason for that is that he and Helen Zille have too much toxicity between them. They can never work together.So he says the two of them should step away, and the DA, with the support of ActionSA, should find another mayor and run Johannesburg. ActionSA then runs Tshwane, where its mayor has done a very good job, and the DA, with the support of ActionSA, runs Ekurhuleni.That's what they are putting on the table. He's already written to and spoken to Geordin Hill-Lewis and said he's not deviating from that. But I did put to him, and I'd love to get your thoughts on this: surely, with the ANC down to 31% of the national vote, a national election should be called early, in the interests of South Africa?Alec Hogg (02:21): So what do you think, Iraj?Iraj Abedian (02:22): I think, Alec, before I answer that, it's important to celebrate the maturity and maturation of our democratic order. It's been peaceful, it's been very democratic in many ways, and it's also a very important point in this process for our nation to begin to act. Not just vote, but act in line with democratic objectives, which is getting the power into the citizens' hands to express their views. For me, on a global stage, it's a very important achievement for South Africa's democratic order. Having said that, from here on, our democracy has now reached the coalition phase, much like Germany and many other countries did.Very few emerging economies have reached that. I think that's important to observe. Having said that, I think it's now about our political leaders. We obviously have to respect their views, but if they personalise the vote that they have received from the population, it's going to be sad. Whether Helen does it, or Herman does it, or whoever else.Personalisation of a democratic mandate is not part and parcel of the democratic order and democratic ethics. But I fully understand where Herman comes from. But Herman was not on the list to become mayor of Johannesburg himself...Alec Hogg (04:09): No, he was. He was. He was ActionSA's candidate, yeah.Iraj Abedian: Sorry, my apologies. So then there is a line in the sand.Iraj Abedian (04:18): And between the two of them, the two parties have to act maturely. Because it's quite clear that to clean up Johannesburg, and Ekurhuleni, and to a much lesser extent Pretoria: unless the cancer of corruption and systemic decay is dealt with very quickly, those three key metros are not going to turn around the Gauteng economy, and by extension the South African economy, no matter what happens in just about the rest of the country. So I think it's very sad that it's become a personal issue, and hopefully democratic values will prevail within the DA to find a wise outcome for this proposed solution of Herman's.Alec Hogg (05:05): What about the ANC? They've now collapsed to just over 30% of the national vote. What is going on inside that party today? You know the party well.Iraj Abedian (05:19): I think, Alec, we've said this many times. Even ANC veterans have said it, and ANC intellectuals definitely recognised this almost 10 years ago: the party has departed from its intelligent, fact-based and value-based governance criteria. There has been very little intellectual debate within the party over the past 10 to 15 years.Wherever intellectual debates and arguments are put on the table, they're dismissed. Even when they are listened to, they are not acted upon. So the party has gone off the rails, morally and ethically, from its own political mandate, and has been captured by mediocrity and a lack of political morality. Of course, we cannot use a broad brush.There are many, many people who are still on the same page as its historic mandate. And very importantly, some of the top decisions that the party has made, such as the Zondo Commission and the Madlanga Commission, are hugely treasured and rare decisions across the political spectrum globally. Instead of covering up the depth and the width of corruption, and mediocre appointments, wrong appointments and false pretences, they have put it in public for the nation to judge. And I think they're paying a price for it. But it's a good contribution to our democratic order.So the party is in a very, very sad state. And it's really sad for the party, for the founders and veterans of the party, and for South Africa to some extent, because it leads to...Iraj Abedian (07:13): ...a lot of unnecessary costs. It has already destroyed a lot of infrastructure, particularly soft infrastructure, and to some extent hard infrastructure in the country, which would have been completely avoidable. So this is self-inflicted, far from the mission of a democratic order, or poverty alleviation, or reversal of historic tyranny against the black masses.Over the past 15 years, and possibly 20 years, the ANC has ended up being an instrument of retardation of development and growth in the country.Alec Hogg (07:51): But now, as you started off by saying, the voters have cast their votes. They have sent a message. The voting public has matured to a point where it's saying no, we will not accept this any further. Surely one would think the right thing to do would be to call an early national election.Iraj Abedian (08:14): Yes, I think that is again a choice that moral political leadership would have to make. To what extent the national executive committee of the party will call that, we have to see. Remember, there's a lot of personal and political capital that would have to be put on the line. At 31%, if they get that in a national election, it would be a very tragic outcome for them, and many of them will be out of power, if not all of them altogether. So I think that's a big call, and to some extent a big expectation for the turkeys to vote for Thanksgiving Day, as the Americans would say.Alec Hogg (09:01): But there's more than just turkeys in the government now. The turkeys are only 40% [of the GNU]. There's a 60% that could vote, presumably, for a fresh election. I'm not sure how the constitution works. Is it a pure 50% plus one vote that calls a new election?Iraj Abedian (09:24): I think with many things in democratic evolution, unless it's tested, we wouldn't know. We don't know, for example, if even a small party with one or two representatives put the suggestion on the table in parliament, then all other parties would have to show their hands, so to speak. It would force their hands. And that's how democratic orders evolve right across [the world].So it's not just up to the ANC and DA or any other party. It's up to those who represent the nation in parliament to test the strength, the depth and the width of our constitutional order by, for example, as you suggest and others have, calling for an early election in line with the dictates of the constitution. And only then will we know who actually wants what.Alec Hogg (10:18): OK. What about Cyril Ramaphosa? There are all kinds of fingers being pointed at him now: that he needs to go, he needs to resign, that in fact he should have left after 2024. The pressure on him, one would imagine, would be extreme.Iraj Abedian (10:39): Absolutely. Remember, almost three years ago, he did want to resign. And his support base within the NEC changed his mind. So it's not as if he's been there hanging on to power. But he also feels, as I see it, and he has said it so many times, that his allegiance to the new constitutional order is what keeps him there. He doesn't need the position. He hasn't glorified himself or the party.But it's not all because of his doing. He has done some very positive and ethical things during the past few years. I specifically refer to the mandate of the Zondo Commission and the Madlanga Commission, and the fact that he, as the leader of the dominant party, has peacefully and ethically accepted the will of the nation, participating very openly and calmly, without any sensationalism or politicisation of the process, in the formation of coalition governments. So he's done what one single player in the party could do. But he's not the party. The party has got backrooms and backroom players who dominate, and they come out fighting when the moment comes. He has to manage that process, and he has not been as successful as we have seen in some of the provinces.Alec Hogg (12:15): One of the tragedies, if that were to happen, and there has to be a good chance now of some big political eruptions on a national scale as well, given the result, is that the oil we haven't found will be pushed further out into the future. I say this because I had a wonderful conversation with the finance minister, who in turn was sharing his engagements with the mineral and petroleum resources minister, Gwede Mantashe, who now appears to be fully on side with "let's get drilling" as soon as we can get the environmental issues behind us.Now, you're an expert on this. I was surprised to hear that you've spent a lot of time looking at South Africa's oil and gas endowment. I'd like you to share with us what this could mean for the country. What's sitting out there that we haven't taken advantage of?Iraj Abedian (13:20): I think, Alec, I feel obliged to disclose that between 2011 and 2012, almost two years, I acted as a part-time economic adviser to [then] Minister of Mineral Resources, Susan Shabangu. So let me put the context there so that it's very transparent, and hopefully it adds some credence to what I'm going to share with you.As a part-time special economic adviser, I spent a lot of time literally producing research and investigation reports on options for South Africa's mineral and energy sphere. That was my mandate. And I produced something like 18 reports in that period, more than one per month, to highlight how critical it was for our mining sector to become a global player again. Not just in mining broadly, but in giving birth to new mining companies, which always requires risky investments, and many, many hundreds of them at a time. And of course, energy was the next one.With regard to energy and your question: at that time and since then, there has been a lot of investment by venture capitalists in the Kudu field, in the Karoo, and of course in Namibia and Mozambique. All of that meant, and this is where my initial research started, that if South Africa, as the pivot, as the key player in the subcontinent, played its energy role properly, we could turn this entire subcontinent into not just an energy hub but a petrochemical hub, with important by-products such as fertiliser.Yes, we all now worry about diesel, as we should, and petrol and gas. But as importantly, we should worry about fertiliser. As importantly, we should recognise the immense phosphate and other minerals that we have on the Atlantic coast.Iraj Abedian (15:44): And a whole lot of other research in those reports suggested that, with Angola already a big player, with Namibia and South Africa with massive reserves, and in the east, Mozambique with offshore and onshore reserves, and importantly, with the technology that Sasol has, which South African taxpayers historically paid for: why should Sasol go to the US or Qatar to capture gas and so on, when we could do exactly the same with the Angolan gas that, as we speak, still burns [is flared] into the environment? And yet we are short of all the by-products, including gas itself.So my proposition at that time was: let's fast-track, not slow down, the catalytic role that this particular sector can play in turning the Northern Cape into a global petrochemical centre, very similar to what Saudi Arabia has done with Jubail. We could do that, and by so doing we could deal with a whole lot of things at once. By that I mean reducing our dependence on imported oil, which is a major source of volatility in the economy, not just the South African economy but sub-Saharan Africa's.We could integrate and fast-track African intracontinental investment and trade [AfCFTA], and all the other technological co-operation that is critical for positioning Africa in general, and South Africa in particular, for what is called the century of Africa's opportunity.And I certainly believe that is one of the key demonstrative industries, not the only one, that could achieve all of that within five to seven years. So a lot of work was done. And I believe none of it has yet received the attention it should, and not because my team and I did it. By now, of course, 10 or 12 years later, it's quite clear that global geopolitics...Iraj Abedian (18:03): ...has gone exactly the way I thought at that time it was going to go, putting us in the driver's seat. At the moment, we're on the back foot. Have we lost the opportunity? The answer is no. Luckily, Namibia and Mozambique have mostly gone the colonial route, but nonetheless they have gone the route of doing the best they could with their national endowment. And we can still reposition ourselves if we operate differently.The question that needs to be answered is: what is there still to be known? It's a 24-hour decision to be made. There is no research to be done, no investigation, no drilling to be done. All of it was done almost 18 years ago. What we need to do now is bring in the investors, the policy and the private sector, and put an action plan, an implementation plan, in place to unlock the whole thing within less than 12 months.Alec Hogg (19:00): Well, in June, Shell called its latest find in Namibia its most promising yet. There have been 25 exploration wells drilled in the Orange Basin, all on the Namibian side. We need to dust off those documents of yours, Iraj, in a hurry. Before we finish, though: what do we take from the elections in America? I know I'm taking you around the world in 30 minutes, but Donald Trump got a hiding, almost like what the ANC got in our own elections. Are there parallels?Iraj Abedian (19:45): With permission, I don't want to get off the Orange Basin just yet. Natural gas does not know boundaries. It's very much like the situation that Iran and Qatar have had for more than 20 years. Qatar became a global player because the Iranian government was under sanctions and unable [to develop the shared field], and was trying to fight as opposed to unlock growth. Underground reserves don't know whether a basin is Namibian or South African. If the Namibians start extracting, rest assured, they will get our share. It's a matter of time. So I want to highlight that point, which is very significant.In my view, as an economist, as somebody who did a bit of work on it, that doesn't mean we must fight with Namibia. We must collaborate. We must create win-win situations, and we can do it.Now, on your point about the US. Of course, the US has its own political structures, and the electorate has not just rebuked but really lashed Trump for a number of reasons. Most importantly because of his mismanagement, or poor management, of the war with Iran, which has led to an unusually and unnecessarily high price of fuel in the United States, which Americans are super-sensitive about.If nobody else, Mr Trump should have known. President Trump should have known how sensitive the American electorate is about the pump price of petrol and diesel. I think he got carried away with his success in Venezuela and thought it was going to be the same thing. And he planned it very poorly. And of course, anybody in the military who told him no, he sacked instead of listening to logic. And this is where some of the parallels with the ANC lie.When governments become too arrogant, too unscientific, too emotional, ideological, or whatever the reason... In my view, anybody who does not want to respect evidence and respect facts is becoming unscientific. And running a government as complex as the United States, as pivotal for the global economy as the United States, on an unscientific, emotional, psychological basis is a recipe for disaster. Mr Trump has experienced it and his party has paid the price for it.And the ANC is doing the same thing. It has done a lot of things without checking the facts, whether the facts were about gas and fuel and the pivotal role they could play, or the facts were about municipalities falling apart. What are we doing about it? You can't issue another statement, another anti-colonial type of statement. A municipality is about logistics management and infrastructure management. At the end of the day, yes, there is politics, absolutely, but that's about 20% of the game. Eighty percent of running a municipality is about immediate, short-term, medium-term and long-term logistics and infrastructure management. When this stuff falls apart, and the government...Iraj Abedian (23:04): ...run by the ANC was blind to it. I tell you, Alec, in that regard: in 2001, when I was chairing the investment committee of the Development Bank, and I'm giving you an example of how deep and how factual what I'm talking about is. At that time, the DBSA, the Development Bank of Southern Africa, commissioned a group of engineers to report on the water infrastructure in Johannesburg, with a view to extending it to Soweto and the emerging black communities. At that time, the report said, and this report is on file so you can check me out, that 15% of Johannesburg's reticulated water was seeping away because the pipes had lost their integrity.Nobody listened to it. That was 2001. Twenty-five, 26 years later, we're paying a huge price for it. How many presidents have come and gone? How many mayors have come and gone? How many Gauteng premiers have come and gone? Nobody wants to check the facts.So President Trump didn't check the facts. Instead of listening to his generals, who had spent their lives worrying about these things, strategic planning against opportunities, options and outcomes, he sacked them. He sacked 11 of them. The ANC did the same thing in South Africa. Instead of dealing with these issues scientifically, factually and systematically, they appointed another mayor who was good for nothing. And the country is paying the price for it. I hope my parallel makes sense to you, Alec.Alec Hogg (24:52): It certainly does. I'm busy reading a book by Barbara Tuchman called The March of Folly. My goodness, she could start a couple of new chapters... well, she passed away some years ago, but it was a Pulitzer Prize-winning book, and one I would recommend to anybody who wants to understand how the world has been mucked up by bad governance, right from Helen of Troy through to the current day. And I'm sure there are a couple more chapters that could be written just from what's gone on in the last little while in the United States and here in South Africa.Iraj Abedian is an economist. He's the founder of Pan-African Capital, a former UCT economics professor and Standard Bank's chief economist, a man on whom we rely greatly, and he will be at the BizNews Conference again in March next year. Try and get there. I'm Alec Hogg, with your Business Edge..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.