Looking to the future and writing it down for its inhabitants to laugh at is a mug’s game. In a world as fluid and dangerous as ours, it’s far safer to roll out the hoary old cop-out that the only certainty is uncertainty — along with Benjamin Franklin’s observation on death and taxes.
But safe writing is boring — 2024 will be a veritable jungle of opportunity and risk. The SA economy will continue to be tossed about on deteriorating international geopolitical seas and hamstrung by internal dysfunction. We will also ride the tiger of our own uncertain political future. Within all this there will be risk and opportunity for citizens and investors.
What we cannot control is the broader international context. In the simplest terms, American hegemony and Western geopolitical power is visibly under strain. It is experiencing degradation at all its edges, including here in SA, where anti-Western rhetoric is as strong as the proposed alternatives are weak. It is visible in a war in the Middle East that is politically poisonous in Western democracies, in the Pacific and in Europe, where Ukraine’s heroic advance against Russian imperial ambitions has faltered into a costly stalemate that only benefits Vladimir Putin.
To make matters more fraught, the US does not have its eye on the ball. This year it will hold an election that will flood domestic news websites and social media with an astonishingly vicious and toxic performance of division and distraction, all supercharged by rampantly divisive algorithms, collapsing trust in media and a dangerous and undemocratic absence of moderate voices.
The two American tribes will agree on nothing, be it Russia, Israel, the crisis in the Red Sea or how to handle China. The US election will be marked by unrest, especially if Donald Trump wins the Republican nomination, as he is predicted to do. Both sides may question the validity of the outcome. It will present a picture of dysfunction unimaginable 20 years ago.
The UK will also hold a general election in which the Conservatives are likely to be obliterated by Labour, but the foreign policy differences between the two parties are essentially nonexistent because they broadly represent most voters. They both support the AUKUS pact and hold the same lines on Ukraine, China, Nato and Israel. The UK’s challenge, likely in Keir Starmer’s premiership, will be holding Nato and AUKUS together if there is another Trump presidency, which would represent the isolationist right of America’s two nations.
The US and its allies have therefore not looked so weak for decades. They are dithering in the Red Sea as they struggle to keep shipping lanes open, prevaricating in support of Ukraine against Russia, supporting Israel against Hamas but imploring it to tone down its attacks, and muttering about Taiwan in an election year there too, a frontier of democracy facing unrelenting aggression.
The level of dysfunction and distraction and the number and severity of the challenges to the West’s dominance all amount to an obvious incentive for its rivals to escalate everything, everywhere — in Europe, the Middle East and the Pacific. We should therefore expect it.
How we helm the battered SAS South Africa through these seas depends on our own context. There is absolutely no reason to expect any improvements in energy supply this year despite the bizarre expressions of shock at load-shedding’s return. The tragicomic nature of the Integrated Resource Plan (IRP) published by the department of mineral resources & energy last week merely confirms its irrelevance.
Equally, the scale of the damage to Transnet’s ports and railways meted out by corruption and incompetence is too big to fix in 2024 or, indeed, this decade. Transnet will hammer our industries, batter our exporters, kills tens of thousands of jobs, add inflationary pressure and weigh heavily on the fiscus, the scale of which will be laid out in a dismal and politically difficult budget.
The ANC will want something to leverage for electioneering (expect gales of hot air about the unaffordable and illegal National Health Insurance bill). The markets will expect something credible though, and the ratings agencies, traders and investors will be on a hair trigger.
Diminishing social support and a stagnated economy will weigh on the social fabric in 2024. South Africans will speak at the polls, probably in May, and the ANC may lose its majority, but the chances of it being removed from office altogether seem slim. Were that to happen we would be pitched into another kind of chaos — the ANC’s client civil service now having a new master.
In all likelihood the ANC will remain in office. Unless there is a coalition with the DA, which both parties say they will not consider, SA will continue to align itself against the US and Western interests politically, continuing to risk its economic dependence on those economies.
No matter how harmful it clearly is, we can expect SA to continue to align with the most illiberal and dictatorial countries and political organisations on earth.
It’s worth pointing out that that SA’s business people, who see great value in this country’s economic and cultural ties to the West as well as the opportunities elsewhere through genuine non-alignment, appear to be in a minority. According to research done by the Social Research Foundation, the ANC’s anti-Western rhetoric lands well with its voters. It’s why they keep on saying this stuff.
It is an argument that those representing business and markets have resoundingly and perhaps unforgivably lost. No matter how harmful it clearly is, we can expect SA to continue to align with the most illiberal and dictatorial countries and political organisations on earth.
The country’s journey this year will in many ways be defined by prevailing geopolitical winds. How we sail it remains to be seen, but the ANC’s choice of coalition partner will define the political price of office for the party and the country. Its declining appeal to voters opens opportunities and risks that are, in the worst-case scenario, almost existential in scale, and in the best case a chance for renewal and change.
Corporate types like to ask themselves “what does success looks like?” For SA, tabling a credible budget, baking in limited progress on reforms of the state-owned enterprises, holding a free election and installing a coalition government that tempers, rather than amplifies, the ANC’s monopoly on power — and even achieving paltry growth in GDP — would, considering the state of things, be a good outcome.
• Parker is Business Day editor-in-chief.
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