Packaging interests as values advances cronyism

Leo Tolstoy famously began a novel, “All happy families are alike; each unhappy family is unhappy in its own way.” SA’s unhappiness is unsustainably unique.

The country’s cultural identities and historical wounds are channelled to repackage factional interests as values. This constrains compromises and undermines coordination. Such meta-messaging used to benefit the ANC; now it only benefits a modest number of cronies.

Democracies are designed to resolve competing interests. Conflicting values are far less amenable to solutions.

SA’s growth and transformation objectives are stalemated by entrenched patronage precluding solution paths amid an increasingly demanding global environment. Unsustainably pervasive patronage is prolonged by emotive debates sidelining constructive deliberations. Values-based distractions range from President Zuma’s diverse personal issues to infusing policy statements with dated communist rhetoric. Such diversions support patronage while undermining policy making.

Destitute people favour politicians that attribute their poverty to the greed of others. The wealthy tend to believe it is fine, perhaps even helpful, to loan money to low-income workers at exceedingly high interest rates. Values are exploited and indulged with little regard for compounding consequences.

It is tempting for prosperous people to blame ordinary Greek citizens for Greece’s troubles and US borrowers for the sub-prime crisis. Such values-based conclusions are partly justified but they disregard facts and insights critical for policy making.

Values based perspectives are the enemy of science and solutions. AIDS was denied by many while being seen by some zealots as God’s revenge on homosexuals and intravenous drug users. Effective research requires isolating value judgements.

Many South Africans linger near subsistence levels. Such poverty coincides with inadequate advancement paths. The global economy being nearly 100 times larger than it was 200 years ago traces to four potent forces: industrialisation; specialisation; global integration; and innovation.

Teaming modestly educated workers with powerful machines surged productivity. That era is closing. The global industrial-to-services swing complicates SA’s growth and transformation challenges while permanently impairing the nation’s commodity wealth. Values based debates crowd-out strategic discussions necessary for responding to global events. Rather, they accommodate unrealistic, patronage-inspired initiatives such as directing state resources to create a hundred black industrialists.

As the economies of East Asia and the West have effectively merged, nation-based economics have been superseded by an integrated global economy where there is an excess of low-skilled labour and a dearth of exceptionally skilled workers. Developing exceptional skills requires much learning - often drawing upon two or three generations – and specialisation.

The global industrial-to-services shift has permanently impaired the nation’s commodity wealth. Thus SA’s economic prospects, for the first time, rely upon truly integrating within the global economy through workers adding value. Yet investments – particularly in people - are woefully inadequate. SA’s workers are more indebted than competitive.

Top priorities floundering, such as education, reflects weak political processes. Inciting voter loyalty through values-focused sloganeering infused by historic narratives distracts attention from service delivery shortfalls.

Being seen as a valued neighbour is emotionally appealing. Trading across Africa does not however, meaningfully advance SA’s global integration. The region’s markets are too small and isolated to inspire best-of-breed competitiveness. Asian competitors routinely sharpen their teeth in large, demanding markets, then chew-up incumbents in smaller markets.

Progress requires aligning various forms of investments, specialisation and innovativeness to achieve global competitiveness and integration. This is doable but the prodigious commercial challenges are exceeded by, and preceded by, SA’s mammoth political obstacles.

Meaningful progress will remain elusive until the ANC leadership and its supporters accept that their values and expectations must be updated to accommodate global dynamics. Such reinventions are unlikely in the absence of an immediate threat of electoral dismissal.

May 2019 is distant; SA’s economic challenges are immediate. Outsiders expect a leadership faction to emerge within the ANC that can purge a deeply entrenched patronage machine and then right SA’s economy by twisting the ANC’s covenants with its supporters from focusing on fairness to competitiveness.

Perhaps the only historical precedent is Japan’s Meji Restoration. Their response to looming external threats precipitated the rise of Asia. Now Asian successes are more relevant to SA’s future prospects than the nation’s difficult past.

Various Asian countries have demonstrated that focusing on competitiveness leads to greater fairness. Born as a struggle movement, the ANC obsesses on fairness and eschews competitiveness and global integration. In today’s world, this precludes broad prosperity.

The global economy, which has supported and been reshaped by the rise of Asia, is not going to reinvent itself to redress SA’s historical injustices. Nor can SA achieve broad prosperity without fully overcoming the political-economic isolation which preceded the 1994 transition.

For many decades, SA’s resource wealth and isolation have provoked patronage systems which restrain: growth; transformation; and integration into the global economy. Zuma’s legal issues have further spurred clientelism.

The constitution ensures that Zuma can only be removed from office, prior to 2019 by the ANC, or through a legal process - which probably could be thwarted by aggressive extrajudicial means.

Perhaps the reason Zuma is so frequently seen laughing is: His patronage machine is deeply entrenched; there are no significant factions within the ANC which support a pro-competitiveness policy shift; therefore trying to recall him remains overly risky. The then prevailing faction would neither be able to fix the economy nor match the largesse Zuma has distributed.

The common denominator among “solutions” currently offered is that they mix massive leaps of faith with ignoring key dynamics. Both ANC and opposition party members are prone to unduly focus on values and ideals.

Parliamentary processes are enfeebled by lack of a looming election while the constitution helps enforce party discipline. SA’s business leaders are highly competent at running businesses but they don’t have the skills or mandates to challenge the nation’s elected leaders.

Street protests about food, fees or Zuma highlights tensions without illuminating workable options. Before SA’s policy processes can identify potent solution paths, regular and much more effective assemblage is required. The significance of the World Economic Forum in Davos reflects its matchmaking between insights and decision-makers.

SA’s public discourse needs to deemphasise values in favour of objective analysis. In 2015 SA’s media began to clearly distinguish between patronage and corruption. The differences between competency and competitiveness remain underappreciated in a policy context. Innovation and entrepreneurialism, while vitally important, must not be romantically misperceived as alternatives to removing core blockages. Pursuing justice, which is essential, is easily conflated with directly chasing fairness, which remains counterproductive.

The ANC internal challenges and no-go areas need to be understood objectively by outsiders. ANC leaders must come to grips with how susceptible to events their party has become.

As currently only the ANC can drive political shifts, their internal curbs limit the nation. Meanwhile, only big business can lift the economy meaningfully and rapidly. Understanding and trust building are blocked by politicalised values. Freshly envisaged forums are required where business, political, and other leaders can interact with local and international experts to impartially unpack the complex interactions which determine economic and political progress.

Interests masqueraded as values mock objective insights. Innovative reflexes can be aligned but only after challenges have been professionally unpacked and key blockages dissected. Assemblage options are needed where partisanship gives way to well-informed deliberations.

SA is an unhappy family. Happier days await more even-handed assessments of how best to advance the nation’s varied interests.

Shawn Hagedorn is an independent strategy adviser. He can be followed on Twitter @shawnhagedorn

This article first appeared in Business Day.