While parties on the outside make menacing noises and declarations of their own piety, the business of building a government is under way.
President Cyril Ramaphosa, inaugurated yesterday, is going to have to increase the size of his already large cabinet to accommodate the DA and a few small parties, but that’s not necessarily all bad if it means prying Gwede Mantashe’s fingers off either mining or energy, at least one of which needs to be liberated from his mismanagement.
For Ramaphosa though, the coalitions, or “government of national unity (GNU)” he is building can’t be simply a ploy to carry on as before. He has an opportunity now for a thorough reset, particularly of economic policy, and he should take it and in the process try to create an authentic consensus here about the economy and society we want.
One of his difficulties even starting a process to craft a new consensus is that his big new partner in government, the DA, is thin on the ground when it comes to economics, and until the election didn’t have an economic policy at all. With any luck though, the party could find itself with a minister in the presidency, possibly DA leader John Steenhuisen himself, as well as mining (split from energy), local government, water, housing, public works and trade & industry.
Hard lessons
But the DA, pitched unexpectedly into national government, is going to learn some hard lessons too. Opposition is easier, and one of its big challenges here is to find a way through the space created by the election results to find a way to talk to the union movement, or what remains of it.
No practical consensus is possible while the DA and unions can’t find common ground. The hostility between them is mutual, but like it or not a buy-in from organised labour is vital to getting our manufacturing and exports and our metros sitting up in bed again.
I’ll go on about this like a stuck record, because it’s important. The DA’s preference is a “social market” economy, a lift from the German Soziale Marktwirtschaft consensus-driven free market model, regulated by the state for social stability and security, that drove its success after World War 2.
But a draft DA economic plan released during the election was drawn up without any consultation at all, and will need to be sold far more widely if it is to get any traction. Its proposal to drop the minimum wage is surely a non-starter now, as is a proposition to require unions to make a deposit of money to cover damage before strike action.
And please can we all start resisting the temptation to count new jobs “created” in the Stats SA quarterly labour force surveys. The numbers are volatile and a poor guide to policy success or failure, yet they make easy headlines. All that matters is the overall rate of unemployment. The GNU should commit itself to a hard target of 25% in three years and 20% by the next election in 2029.
An exhausted SA is crying out for a model that works. It cannot be ‘convened’ by a government looking for a quick deal, or a pact.
To get that right the unions have to come to the party as well and recognise they cannot survive merely as the chattel of one political unit, and that business is a partner rather than an opponent. The Germans do consensus brilliantly. When Porsche tried to take over VW in 2008, for instance, unions on the VW board played a decisive role in fighting off the bid.
An exhausted SA is crying out for a model that works. It cannot be “convened” by a government looking for a quick deal, or a pact. Rather it has to be the result of a relentless search for common ground between social partners without party-political design. A so-called second Codesa gaining currency inside the ANC post the elections may be a platform but will require deft handling to succeed.
The Germans got it right because their country had been obliterated by war. We are also on our knees, but there’s still a lot of hatred in the air here. It has to go. We get the country right, surely, by accepting that we can’t do everything at once. The ANC is addicted to the notion that it can fix everything. The DA also went into the election with multiple priorities. But a priority is by definition a singular thing. The challenge is to choose the thing.
Education or unemployment? Choose one to fix first. Health or exports? Choose. BEE or new investment? Choose. Poverty, unemployment or inequality? For crying out loud, choose (and if it isn’t poverty you’re a hypocrite). You obviously can’t ignore everything else, but you rally the country behind tangible and popular goals one at a time.
The world is becoming more complex and we are being left behind. Our auto industry is in trouble despite the best efforts of industrial policy. VW and Isuzu have both recently made clear they will not be making electric vehicles here. Mercedes-Benz is cutting its output by a third in East London. Our biggest steel producer may soon close half its production facilities. Valuable scrap metal is piling up in storage in defiance of high-handed export bans designed to save the local steel industry.
We need to trust markets more and central planning less, understanding we must live with both. What works? We cannot expect a citizen to work for a wage he or she cannot live on, but it is also way too much to expect all employers to provide pension and healthcare packages to their employees or to match centralised bargaining agreements. Nor should we entertain the comforting notion that globalisation ruined SA manufacturing or that it can be simply reversed by fashion or ministerial fiat.
The rubber is finally hitting the road here, thank goodness. We fix it now or we lose it. We could easily build 3-million houses before the next election, and in the process kick-start a decisive and powerful economic recovery.
And if the government hasn’t got the money it needs to find a way to get the private sector to do it.
• Bruce is a former editor of Business Day and the Financial Mail.
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