Finance chiefs and presidents: political frenemies

Even under the best circumstances the relationship between a finance minister and his political boss (a president or a prime minister) is not an easy one. Without a certain level of maturity, the two can easily pull in different directions, thus undermining a country's long-term prosperity.

In South Africa today, President Jacob Zuma and Finance Minister Pravin Gordhan are pulling in different directions.

Take Zuma's visit to SAA, which he undertook without the finance minister, the political head of the airline. Given the tension between the two, perceived or real, Zuma's visit to SAA without Gordhan added to the perceived widening gap between the minister and his political boss.

A further complicating factor is Zuma's connection to SAA chairwoman Dudu Myeni, who is also chair of Zuma's foundation. It is common knowledge that there are tensions between Myeni, the SAA board and the National Treasury. So Zuma's waltz into SAA without Gordhan can only be read one way: he was there as a show of support for Myeni.

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What's worse, the Presidency issued a statement after Zuma's visit saying that the president had "committed his government at its highest level to assist the airline to overcome the challenges". There's not one reference to the fact that the president will raise the issues raised by SAA with the airline's political boss, the finance minister.

The SAA visit by Zuma is a classic case of the political boss and his finance minister not only pulling in different directions, but the political boss deliberately undermining his minister.

The widening gap between the two will hamper attempts to place the airline on a sound financial footing. But most damaging is the fact that Zuma's behaviour strengthens the hand of those who want to use the airline as a personal piggy bank.

The gap between a finance minister and his political boss is not uncommon, though. Nor is it a uniquely South African phenomenon. It comes naturally, much like the tension in a band between bass player and drummer.

Wynton Marsalis, the composer, bandleader and trumpeter, says bass players and drummers argue constantly about the time. Where bass players rush, drummers, the band's timekeepers, drag.

"So, there's always conflict in the kitchen. The rhythm guitarist once served as the referee, but he unfortunately faded from the rhythm section when big bands stopped being commercially viable," wrote Marsalis in Moving to Higher Ground: How Jazz Can Change Your Life, a book he co-authored with historian and screenwriter Geoffrey Ward.

As mentioned in a column last year, there's inherent conflict between a finance minister and his boss. It arises from the fact that their responsibilities, as explained by David Lipsey, are not exactly the same.

Lipsey, writing in The Secret Treasury: How Britain's Economy is Really Run, says the responsibilities of chancellor of the exchequer (the UK's finance minister) are to deliver a strongly performing economy with the right level of public spending and right taxes to pay for it. The chancellor is, at the margin, politically influenced.

The chancellor's boss, on the other hand, is strongly influenced by the immediate politics of economic policy, including political management of his party.

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At his best, a finance minister finds ways to help his political boss attain his political objectives. In turn, his political boss helps buttress the political standing of his finance minister. Key to this mutual dependency is the understanding by the political boss that his political goals are not achievable so long as his finance minister has no credibility, within the governing party and outside it, especially among economic actors (investors in the main).

By credibility one means that the finance minister's word must be believable.

The challenge for Gordhan is that economic theory offers neither certainty nor comfort, a point eloquently captured by Edmund Dell in The Chancellors: A History of The Chancellors of the Exchequer, 1945-1990.

"Politics is an inevitable presence with its demanding questions and its partisan answers often pressing the Chancellor against his better judgment, or at least that of the Treasury. At the centre of political attention, he will be subject to a spate of criticism from many people, all of whom consider themselves better equipped to define policy than he. There are no secure stepping-stones to a more prosperous future - all are at least slippery, some are merely mirages," wrote Dell.

In the absence of anything better, Dell argues, the chancellor may watch the market, which is self-opinionated, short-sighted, often passionate rather than rational, but which may nevertheless provide the best anchor.

"His essential judgment should be whether his policy is robust; robust against the market, robust against errors in economic forecasting. He should not, whatever he does, claim more for his policies than they seem optimal in the circumstances as he understands them. He should, so far as he can, avoid risk," concluded Dell.

What's worse for Gordhan and his Treasury officials is that the politics they are up against is not normal in the sense described by Dell. It is the politics of patronage and the looting of state resources. Such politics seeks to exploit any gaps in the uncertainty inherent in economic theory and economic policy management.

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The disciples of the politics of looting are ever so willing to offer what may on the surface appear to be economic policy certainty. They will point to economic policy stones, which on closer scrutiny aren't real, except in the sense of enabling them to siphon off state resources.

The building of nuclear power stations is one such example. It is offered as a solution to South Africa's energy shortage. But in reality it is nothing but a project designed to secure a sizable loot for a handful, leaving South Africa saddled with massive debts.

The only comfort for the Treasury and its political head comes from Lipsey's words:for all its manifest failings, its infuriating habits, its misjudgments and mistakes, the Treasury does a difficult job well.

"For low salaries, for little thanks, at the cost of grinding labour punctuated by periods of acute stress, generally favouring the public interest over personal interests, and providing a serious, considered and now even a successful core to the country's governance, the Treasury deserves, though it would never expect, quiet praise," he wrote of the UK Treasury.

Lipsey could have been writing about South Africa's Treasury, which remains one of the cores of this country's good governance.

mabheki65@gmail.com

Sikhakhane is deputy editor of The Conversation Africa