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Tue Dec 06 14:09:10 SAST 2016

The Big Read: This government is all hat, no cattle

Tony Leon | 2016-03-30 00:21:05.0
Tony Leon. File photo

Doubtless, President Jacob Zuma spending the Easter weekend in the vast desert sands of Saudi Arabia proved a welcome break from his multiplying troubles at home.

But the problems and violence in one corner of our restless world, Pakistan, literally blew up and thrust it on the centre of the global stage.

Sunday's horror show in the Pakistani city of Lahore, near the entrance to a children's park, claimed over 70 lives, many of them women and children.

For the deranged planners of this stupefying act of terror, the timing was excellent. The venue and chosen hour for this suicide bombing was - according to reports - "timed to coincide with the evening holiday rush to one of the most popular family recreation areas in the city".

But the Pakistani authorities, while no doubt dealing with the terrible aftermath of such unfathomable evil, have to confront a degree of complicity in its origins.

The Taliban, which claimed responsibility for this latest outrage, was founded by the state's all-powerful Inter Services Intelligence arm, originally to create a regime favourable to Pakistan in neighbouring Afghanistan. Pakistan landed up with more than it bargained for.

A similar strain of ambivalent dualism pervades Zuma's Saudi hosts. On the one hand, they allow US forces to be based in their country and appear to tilt in favour of the West's war on terror (anyone doubting that it is indeed a war needs to look back to only a few days before, to the carnage wreaked in Brussels by another even more extreme jihadist terror group, Islamic State).

For the many critics of Zuma's Saudi royal hosts, their relationship with the West is described as "transactional".

And while self-interest is the basis for most international relationships, it takes a special sort of hypocrisy to simultaneously back the West and also fund the various terror networks operating against it: al-Qaeda and the Afghan Taliban, for example.

Thanks to a leaked diplomatic cable made public by Wikileaks in 2010, no less an authority than then US Secretary of State Hillary Clinton, fingered wealthy Saudis as financial backers of both these terror networks.

South Africa has happily, for decades now, been spared the export of jihadist terror to our shores. Perhaps a combination of geography, good intelligence, lack of religious alienation or just plain luck explains it. And long may it last.

But the peculiar doublethink displayed by Zuma's Saudi hosts, or the Pakistani government, the strategic equivalent of having your cake and eating it, certainly manifests itself, with less deadly consequences, in both our domestic and international commitments.

We know how economics is so closely linked to the world of politics, and how if we were to isolate one of a host of items from the terrorist-recruitment menu, it would be to create rising prosperity for ourselves and the wider world.

In this regard, the International Monetary Fund recently published its projections for global growth in 2016 and 2017. For the advanced economies, it's a reasonable 3.4% and 3.6% respectively. But it's even better for the developing economies and emerging markets at 4.3% in 2016 and 4.7% next year.

But on these tables, South Africa is a growth laggard, feebly growing by 0.7% this year, with a slightly better forecast of 1.8% for next year.

One explanation for our shuttered prospects lies in the dualism or contradictions of simultaneously pursuing contradictory ends: embracing both the National Development Plan (good for growth and business) and the national democratic revolution (bad for both). Or declaring, as Zuma did in Davos in January, that "South Africa is open for business" and simultaneously ramming through parliament a host of anti-business legislation, from expropriation bills to diminished foreign investment protection.

While Zuma seems entranced by the charms of the fortune-seeking Gupta family, he might do better to spend some time in the company of a man, described by the Indian magazine Outlook, as "one of the world's 25 smartest Indians".

Ruchir Sharma is the head of emerging markets and global macro at Morgan Stanley Investment Management. He is also the author of the 2012 bestseller Breakout Nations: In Pursuit of the Next Economic Miracles.

He forecast that South Africa would not belong in the winning company of a breakout nation, one that could leverage its position in the frontier markets to achieve high rates of economic growth and shared prosperity. One of several negatives he picked up here was the phenomenon he identified as "maximum government and minimum governance".

Any business resident of Johannesburg would identify warmly with the sentiment at micro level: the potholes are unfilled, the rubbish is not collected and the robots don't work.

But then you try to get a visa for a foreign business partner, sort out your ever-changing BEE requirements or simply try to downsize your personnel in a downturn and you encounter the state in all its might and complexity.

Sharma later cast his eye on the March 2013 Durban Brics Summit (Brazil, Russia, India and China) international grouping we had then just entered.

He described the gathering as "a relic from the previous decade". He noted that the "once bright spot of Africa" had now joined a "motley group", and cited the slowing economic growth in all of them.

With the exception of India, which underwent a change of government since that observation, the political economies of Russia, China and Brazil have, along with South Africa's, immeasurably worsened since then.

Actually, the formula for faster growth is no mystery or secret: Sharma reminds us it needs productive investment and a more business-friendly environment.

It does not require mediocre performance by a government living off the liberation dividend. Actually, he made that reference to the Indian Congress Party, with which he saw a close parallel with our own ANC.

After the book was published, the Congress Party lost power, and under a new and business-friendly government, of the Brics countries only India is posting ever-increasing growth rates.

South Africa still has many comparative advantages. It is far away from the terror hot spots, and has an intact constitution, a lot of local talent and resilient private-sector excellence. It just needs a government that will either embrace these advantages, or get out of the way of progress.

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