South Africa's Mbeki & Zimbabwe's Mugabe: Pointers to the dynamics of policy contradictions!

The African National Congress's decision to sack President Thabo Mbeki was described by some South African commentators as "regicide". Certainly it was unprecedented in South African history that a head of state is dismissed in that way. Nor is the ANC the kind of organisation that goes in for this humiliation of its leaders. So why did it happen? Fine, the immediate cause was Mr Mbeki's ongoing feud with his former deputy, the ANC party leader the populist Jacob Zuma. But this was not just a personal vendetta between two men. Behind these events lay two major factors: one political, one personal. Fight with the left Thabo Mbeki, although a former member of the South African Communist Party, had used conventional economic policies to drive the country's development agenda.Tight monetary and budgetary targets had been set and met. The result had been a period of unprecedented economic growth, reaching 5% a year in recent years. In June 1996 Finance Minister Trevor Manuel introduced a neo-liberal economic strategy known as Growth, Employment and Redistribution (Gear). This included commitments to open markets, privatisation and a favourable investment climate. The ANC is in a formal alliance with two groups on the left, the Communists and the trade union movement, Cosatu. Both were fiercely critical of the strategy and argued that they had been excluded from its development and implementation. In the report to the Communist Party Congress in July 1998 the Central Committee spelled out their objections to Gear in great detail.This concluded: "We remain convinced that Gear is the wrong policy. It was wrong in the process that developed it, it is wrong in its overall strategic conception, and it is wrong in much of its detail. "At the end of the day, we cannot allow our entire transformation struggle to be held hostage by conservative approaches to the budget deficit." In May,2008 Blade Nzimande, General Secretary of the Communist Party wrote: "Despite the many modest gains that our own democracy has made since the 1994 democratic breakthrough, our own self-imposed structural adjustment programme, Gear, failed to make a dent in unemployment (unemployment actually increased dramatically between 1996 and 2006), and eroded the capacity to build a developmental state." These criticisms are not just held by the Communist Party, they are a reflection of the unease on the left as a whole at the policies that Thabo Mbeki adopted. Anger at the president's strategy to tackle the problems of unemployment, in particular, contributed to his downfall. Victims unite All politicians make enemies. That is the nature of the game. But President Mbeki has made more than most. One example should suffice to illustrate the problem. In April 2001 the country's national daily, the Star, had a headline that read "Mbeki plot rocks ANC". President Mbeki had sent his minister of safety and security to accuse three leading members of the party of plotting to oust him. The accused - former ANC secretary-general, Cyril Ramaphosa and two former provincial premiers, Tokyo Sexwale and Mathews Phosa ­- were among the party's most respected figures. All three were men who had driven to seek their fortunes in business after being marginalised by Mr Mbeki. To this day there is no clear explanation of why these extraordinary charges were made. Nelson Mandela himself emerged from retirement to say that he held all three in "high esteem". The Mail and Guardian newspaper commented at the time that it was a strategy worth of Joseph Stalin and said: "Many observers have dismissed the plot theories as a strategy to warn off potential competitors with ambitions to challenge Mbeki's leadership." No evidence was ever led against them, no charges were laid and the matter was swept under the carpet. However, it was certainly not forgotten. Today Mathew Phosa is the ANC Treasurer General, one of the top party posts. Cyril Ramaphosa and Tokyo Sexwale are members of the National Executive. Their names, along with those of Zwelinzima Vavi, leader of the trade unions in Cosatu and Blade Nzimande of the Communist Party, have been cited in the South African press as among those who wielded the knife against Thabo Mbeki.

Does democracy have a face in the differences to Zimbabwe's power structure that keeps Mugabe strongly in charge? South Africa faces the same structural challenges on land as Zimbabwe. Mbeki's quiet diplomacy on Zimabwe coupled with thi ANC internal revolt from the Zuma camp, a non-compromising western politicoburo against Mugabe exposed Mbeki. While Mugabe's land distribution policy re-evented him among the peasant Zimbabweans in the immediate and short term, Mbeki's policies alienated his ANC support due to over-expecation.Land ownership in South Africa remains a hot political issue. Condemning Mugabe woould have accelerated Mbeki's fall due to the organizational strength of ANC despite the political capital that he would have gannered from the US,Australia, Newsland & Britain. As it turns out, Mbeki's time for the curtain to fall was up.

Economic growth does not solve a poor man’s woes!

UGANDA has registered numerous successes in building her economy. The economy is currently “growing at an astronomical rate” of 8.9% per annum and this is one of the highest rates of growth in the world. However, the country’s economy boasts of the dominant 68% of the population solely engaged in a hand-to-mouth production! By implication, there is poverty amidst this highly acclaimed progress. Uganda has been ambitiously pursuing policies for achieving economic growth over the last 20 years. Some of these policies include curbing inflation that comprise; reduction in liquidity, practising fiscal discipline through reduced public expenditure in health and education; attracting foreign investors and enhancing export performance and controlling the capital inflows, among others. Uganda is experiencing an inflation rate at 13.7% (Bank of Uganda, July 2008) and this is attributed to exogenous shocks especially increases in prices of energy particularly petroleum products. It has not been so uncommon for the ordinary people to complain about high commodity prices for basic goods like salt, soap, paraffin and especially food which have almost doubled. This fuss was not only Uganda’s experience but the world over. Paradoxically, the measurement of inflation is based on “underline” which technically means that there is no consideration of food prices, yet it is foodstuffs that experience most price volatility. It is more ironical that it is the low income earners that spend their largest proportion of their incomes on food. Apparently, the local person suffers the full brunt of price escalation. The implication is that the control of inflation could have been more rewarding if the measures addressed “headline” inflation i.e. addressing price escalation including foodstuffs. It should be noted that macro-economic growth does not benefit the ordinary poor especially in Africa where most economies are agrarian largely dominated by subsistence producers (hand-to-mouth). This means that these people are spectators in the market system since they basically have nothing to put on the market. But if the poor remain excluded from the mainstream economic growth, the well-off will pay more in social costs associated with increasing poverty and joblessness. The cost will manifest through high expenses on personal security and crime prevention.As Robert McNamara, the former president of the World Bank and American Secretary of Defence argued, “widespread poverty amidst islands of wealth is more dangerous to the latter.” So, if governments do not deal effectively with poverty, then, poverty will deal more destructively with governments. Recall the reasons for the emergence of the French revolution where the people could not afford to buy bread but Marie Antoinette, the celebrated arrogant and extravagant wife (Queen) of King Louis XVI sarcastically advised the poor and hungry French mobs to “eat cake if they cannot afford bread”. Maintaining a favourable balance of trade (whereby the country’s exports’ receipts are higher than imports’ invoices) is a very necessary aspect of macroe-conomic performance. This makes foreign investment needed and welcome. Nevertheless, it would be more prudent to provide incentives to foreign companies based on their sourcing of local content like employment of the local labour force; local raw materials; and helping domestic manufactures to become more competitive. There is need to review the economics of Washington Consensus which is premised on “Less state and more market”. The state must not only remain relevant but actually must be effective if it is to cause transformation of the economy. This is what Robert Wade of the London School of Economics calls “the need for the state to govern the market”. The argument here is that while the market provides environment for efficiency, there is a danger of creating exclusion of the poor from the fierce competition usually worsened by imperfect markets. If imperfect markets are left unabated, it can be a recipe for conflict and disintegration in extreme cases. Poverty reduction is part and parcel of economic growth. The argument that growth must be achieved before redistribution is a mirage. The trickle-down mechanism based on the assumption that economic growth (first economy) will filter through to the poor (second economy) does not hold water. This implies that if the growth strategy turns belly–up, poverty reduction will sink with it. This reminds one of the old adage that “the poor man’s walking stick is support for the rich”. What is really needed is the welfare net to soften the blow. There are a number of examples which show that relying solely on the market has not created efficiency. The British rail system was privatised but there are serious efficiency gaps in keeping time, collisions, etc. Similarly, there is evidence that economic growth in many countries has not trickled down to the poor. It is therefore apparent that governments need to provide social security for those waiting for windfalls of economic growth. But even if economic growth finally arrives, it is unlikely to narrow the gap between the rich and the poor. For example, South Africa is the continent’s most successful economy with a GDP, amounting to a third of all 48 sub-Saharan African economies combined. Paradoxically, it is the same economy that is encumbered with widespread dissatisfaction by the unemployed, increasing poverty and crime. I was recently in South Africa and I travelled in one of the domestic flights but I hardly saw any other black person on this flight! There were only whites and Indians—the top beneficiaries of Africa’s most successful economy. Where are the benefits of the highly romanticised growth in South Africa? Similarly, Peru has been one of the most successful countries in Latin America with a GDP growth of 9.2% per annum but with paradoxically high levels of poverty, vulnerability and a disgruntled population. The Peruvian people give little credit to President Allan Garsia for the strong economy just as former President Thabo Mbeki of South Africa has been thrown out of the presidency yet, he has presided over a vibrant economy. Coming back home, the Uganda government has claimed an economic growth of 8.9% per annum in the 2007/8 financial year. This is among the highest economic growths in the world but how many Ugandans can identify with this growth? Ultimately, what Ugandans require are education and skills development; employment creation; improved livelihoods, improved productivity, and increased welfare, rather than figures and macro-economic policies that have little meaning to an ordinary poor hungry person. Poor people understand their needs better than anyone else and government must take its lead from them not the other way round. The ordinary people should be allowed to voice their needs and government action be based on the needs assessment of the people but not what the government thinks the people need. The writing is clearly on the wall.