Can Cyril take a party punch and keep fighting? – Marius Oosthuizen

CAPE TOWN — Packaged in the form of a letter of supplication to US and EU friends, Future of Business SA Project leader, Marius Oosthuizen, cautions President Ramaphosa not to yield to populist pressure by running ahead of the legislature and the courts regarding expropriation of land without compensation. He’s alluding to Cyril’s predecessor in his famous late-night TV Nenegate cabinet reshuffle which Ramaphosa somewhat mimicked recently in announcing his party’s intention to amend the Constitution to more easily facilitate EWC. Oosthuizen is pragmatic about EWC in the context of SA’s history and legacy and believes that if properly managed while respecting our democratic institutions, the international investment community can be pacified. But it will need lots of patience. It’s a sober and rational call for an adaptation of land use patterns, coupled with aggressive human capital development and state-coordinated stimulus of the economy, taking decades. The question is, can Cyril remain on the high wire while balancing the very real populist demands churned to the max by his traditionalist (read Zuptoid) opponents? If he can, history will judge him a statesman and hero. Can he manage the short-term party-approbrium? Our recent political transition so eloquently refers. – Chris Bateman

By Marius Oosthuizen*

The president of South Africa, Mr. Cyril Ramaphosa has announced that his party, the African National Congress (ANC), intends to expropriate land without compensation (EWC). Adding to the turbulence caused by the already hotly debated policy, was the president’s decision to make the announcement in a late night televised address reminiscent of former President Jacob Zuma’s cabinet reshuffle now infamously known as Nenegate. Furthermore, the announcement seemed premature given the ongoing parliamentary process whereby a series of nationwide public hearings on the matter by the constitutional review committee of the legislature, is yet to report it’s findings.

Marius Oosthuizen

Let’s be clear, the president’s chosen course of actions looks amateurish, haphazard and irresponsible.

Under normal circumstances, in a so-called western-style constitutional democracy, with a free market capitalist system, the very notion of EWC strikes at the heart of property rights, setting in motion a domino effect of – loss of business confidence, loss of investment in fixed asset formation or even divestment and consequently, the demise of the economy. This week the Wall Street Journal (WSJ) eloquently contemplated the Venezuelan or Zimbabwe-style disaster that seems to be on the cards for South Africa under Ramaphosa. Local lobby groups have also raised concerns that EWC would put important trade deals such as the African Growth and Opportunity Act (AGOA) at risk.

Naturally, the risks of a seemingly populist policy drift in the ANC and the executive raises the sceptre of a departure from South Africa’s track record as a reliable trade partner. It calls into question our nation’s commitment to the rule of law, protection of rights, the bedrock of any open, globally connected economy. But such a perspective, though predictable, misses the broader context and historic moment in which South Africa finds itself at this time.

Land, identity and social justice

South Africa’s colonial and apartheid history needs no elaborate explanation. However, the legacy of those eras of oppression, forms the backdrop against which the president must provide national leadership at this moment in time. It is a legacy that has resulted in a social stratification of a small hyper-privileged elite, who enjoy the benefits of education, conspicuous consumption and well-remunerated employment in the increasingly digitized knowledge economy. These bankers, lawyers, managers and broader professional class, enjoy the lifestyle benefits of their counterparts in the Nordic states, in London, Zurich, Beijing and New York, only they mitigate their security and healthcare concerns with costly private provision.

Below them lives a embattled middle class and working class, who struggle to temper their aspirations as modern urban suburbanites, absorbing the cost of living imposed on them from abroad via the resurging oil price, rising cost of imported consumer products and a decades-long weakening of the currency. At the base of the social strata sits a massive poorly skilled and mostly unemployed class of poor, who have seen the sunlight of political freedom of the last two decades turn into an unbearable struggle between having enough to escape the claws of abject deprivation but having too little to have any sense of Maslowian safety. Too rich to die and too poor to live, they exist in a state of limbo, watching resentfully the grotesque affluence of the other end of the social pyramid.

Of course the ANC’s own horrid legacy of economic mismanagement, particularly under Jacob Zuma, and the pandemic of corruption championed by the looter-in-chief, must take some of the blame for this sad state of affairs.

You see, South Africa has a social justice problem, that is presenting itself as an identity crisis bound up in a phenomena now being called land hungerI believe it was Saint Augustine who said, “In the absence of justice, what is sovereignty but organized robbery”.

This is the reason racialised debates have again become such a prominent feature of the South African political discourse.  The face of poverty is black, and the human beings behind that face have a memory – a story in which land and their right to access it was undermined and inhibited. The emerging electorate, a combination of disappointed old voters and aggravated new ones, don’t feel securely at home in their country, sensing a deep alienation from their own homeland.

President Ramaphosa understands this full well and needs to set a table at which these citizens can come and sit. Inconveniently, the complexities of our history and the idiosyncrasies of global economic interconnectedness in this current order, are at odds. I’m quite sure that Mr. Ramaphosa understands this as well. He must therefore reunite his own party, while walking the tightrope between accelerated social transformation on the one hand and attractiveness to international capital markets on the other.

Certainty, due process and patience

South Africa is at the threshold of a second transition. The first was from a police state to a democratic state. The second will be from a feudal aristocracy in all but name to, ideally, an inclusive social democracy. The path to the latter will need to involve a basket of measures, one of which is an adaptation of land use patterns, coupled with aggressive human capital development and state-coordinated stimulus of the economy – for decades. The transition requires, no demands, a seemingly ambiguous but ambitious set of policy measures and a unique commitment to the medium and long term. Unfortunately, not even EWC will serve as a silver bullet to resolve systemic exclusion, but it can be leveraged as a catalyst for systemic change, IF accompanied by other measures.

The best-case scenario for South Africa, in the short term, is that the current President wins the 2019 election, the ANC pulls its divided self together and turns their shattered reputation into a mantra for better governance. In this scenario, if the president allows the legislature to do its work on EWC, allows the courts to test the limits of progressive social policy and continues to provide assurances to the markets, South Africa stands a chance of a managed transition.

The mood in the country is such that any delusion that there can be continued reconciliation without redress, is a dangerous game of Russian roulette. It’s just a matter of time until destructive forces of radical revolution break the mould in which South Africa’s only chance of prolonged democracy now operates. This should be averted, not because change should be prevented, but because change should be skillfully and patiently managed, preserving the best of what history has bestowed on South Africa while driving a critical transformational agenda, as we like to call it.

This will require our friends, particularly the US and EU, to bear with us and be patient. South Africa is far from being a basket case or failed state or “another Zimbabwe”. We are in many ways just like other post-colonial countries but in some ways we are a unique little country with a tough social fabric and deep-seated resilience. I for one believe we can pull away from this particular precipice and turn once more to higher ground. It will require leadership of a caliber rarely seen, but it will also require partnership and commitment from you. Hopefully we can rely on your commitment as we strive to rebuild our nation from the rubble of our history.

  • Marius Oosthuizen is a member of faculty at the Gordon Institute of Business Science, University of Pretoria. He teaches leadership, strategy and ethics. He oversees the Future of Business in SA project which uses strategic foresight and scenario planning to explore the future of South Africa.