Hello and welcome to the So What podcast in which political economic analyst JP Landman
discusses the issues uppermost in the minds of South Africans. You can find a written
version of this content on JP's website jplandman.co.za. I am Ruda Landman and I am your host.
Hello and as always a very warm welcome to this podcast which accompanies JP's latest
newsletter dated the 17th of June 2024. And if you look at that date then of course it
has to be elections. But the subtitle is interesting, a historic shift to the middle. JP you start
with a whole list of things that you say did not happen and which are almost as important
as what did happen. Yes absolutely. I identified six things that people predicted beforehand
with great intensity and certainty will happen in this election and it did not happen. And
you know Winston Churchill said if you want to look forward all you have to do is look
backwards. And so if we look a little bit backwards to what did not happen in this election campaign
over the last two or three months and particularly in the last month then we learn quite a few
things. And the first thing that we learn is that all the predictions about violence
did not materialise. We had all manner of threats being made from all sides. The commentary
art joined in and predicted how bad will it be. Security groups released all kinds of
cautionaries on how people must defend their properties and themselves and so on and so
forth. And in the end the violence did not really materialise. Also if you go a little
bit deeper and you look at political assassinations, so far this year, and it is now June so it's
only half a year, but so far this year 11 people have been killed in political assassinations.
Last year that number was 30 and the year before that was 41. Now our 11 political murders
11 too many? Absolutely. Is it less than 30 and 41? Absolutely. So the violence thing
that did not occur and a reduced level of political assassinations I think is something
to note and to celebrate. The second thing that did not happen was the threat of huge
disruptions either on election day or on a day that the results were announced. Well
again none of that happened. Quite apart from violence, if we just talk old fashioned disruption,
it did not happen. And once again it tells us that our institutions are holding that
the majority of our people are actually not the radical kind of rabble rousers that people
predict them to be. The third thing and probably the most important thing is the fear that
if the ANC loses power it will cling to power and will not let go. Well that was proved
and wrong in quite a spectacular way. Within two weeks the ANC moved from being a majority
party to a minority party dependent on other people, other smaller parties and doing that
transition in two weeks. It was absolutely quite astonishing. The results were announced
on the 2nd of June and 12 days later on the 14th of June the DA and other opposition parties
signed the coalition agreement. I think it is something that again we take for granted.
We think that's the way it should be. But of course it's not necessarily the way it
should be as we saw in the United States in the presidential election of 2020. The fourth
thing that did not happen was that Cyril Ramaphosa was not kicked out by the ANC when the ANC
support dropped to 40%. This was widely predicted by a number of analysts and members of the
commentary art. It did not happen. The fifth thing that did not happen was that load shedding
did not start or recommence the day after the votes were counted. Now of course load
shedding can come back. I think that's a given. But give credit where it's due. For 80 days
we haven't had load shedding and it's not because we burned more diesel. The diesel
numbers have been made public. They're well known. They're out there. No we did not or
ESCOM did not burn more diesel. Yet in fact they've burned about a tenth of what they
burned last year this time. It was a dramatic reduction in diesel burning and in spite of
that load shedding did not return. So maybe time to take our default cynicism and temperate
a bit. And then the last observation I want to make is the polls were not wrong. As polls
were published in the election period and results came out and people saw different
trends and so on. There were a variety of people that you would expect. They're actually
a bit more better informed. That's a better formulation. Dismissed the polls and said
it's not, you know, it can't be. It's probably wrong and so on. And in the end no poll got
the numbers 100% correct. No poll did that. But the polls did tell us about the big trends.
It did tell us about the big breaks coming and it has transpired in that way. So Ruda
you can make of these six non-happenings as I call them. You can make of these six non-happenings
whatever you want, whatever you wish. But for me what stands out is the point I've already
made. Most sub-africans are not radical. They do not sit on the extremes. They sit in the
middle and all they want to see is a peaceful at ease country with itself and I think we
saw that. And the second thing that came out is our institutions are robust. They were
attacked. They were threatened. They were put under pressure. They came through with
flying colors. And the third thing I think which is quite clear is that we have the capacity
in the country to conduct world quality, global quality polls and also after the first election
results come in global quality projections of what the final result would be. Most of
the projections were absolutely spot on and even those that were a little bit shaky in
the beginning corrected themselves and gave us a projection very early on in the counting
phase which gave us the final result. And I think that's something that we as sub-africans
can be proud of.
And if we look at where we are now which looked so impossible just a day before the election
results were announced, you did write about the possibility of a Toenadring, a moving
closer between the DA and the ANC, twice in 2023. Remind us.
Yes, a year ago, 13 months ago in May 2023, I did a note where I said exactly that that
I think we need in the country a grand coalition. I define the grand coalition as the big parties
of the middle, the ANC and the DA coming together reinforcing the middle ground. Of course, there
were people who didn't like the suggestion. But a couple of months later in August 2023,
I did a follow-up note in which I pointed out the developments that are taking place
at that stage have taken place in our body politic, which pointed clearly that we're
moving towards coalition territory. So that was in May and in August. And then of course,
in May this year, the actual election result, the fact that the ANC was pushed to 40% pushed
us very firmly into coalition territory. So that is where we are now.
Why the government of national unity rather than a coalition?
I think that was a very sophisticated finesse, if I can use breach terms, that was played
by the ANC. What did the ANC achieve by talking about the government of national unity? First
of all, they avoided a binary choice between either the DA or the EFF MK. The entire world,
South Africa, the global media, everybody, when the election results became clear, bought
into this binary choice. It'll have to be either this one or that one. And the ANC,
which have always been good political operators, sidestepped that binary choice by introducing
the notion of a government of national unity. With that, they got the initiative back, they
avoided the binary choice, and they were sort of in charge of the process. And that brought
the second consequence of the ANC doing that by inviting people to join the government
of national unity based on common values. And then they made predominant, the common
values are adherence to the constitution, adherence to the rule of law. By putting that
upfront very strongly, they effectively sidelined or marginalized the EFF and MK because both
those two parties cannot meet those preconditions.
Well, especially MK.
They're in favor of replacing the entire constitution. But the ANC didn't have to make a song and
dance about it. They just put up the precondition and the other two parties then walked away.
So they marginalized themselves, which puts the ANC in a better political position.
You also make an interesting point about how our electoral system actually gave rise to
where we're at now.
Yeah, I feel very strongly about that. In 1994, our forefathers and mothers gave us
an electoral system which is based on proportional representation or also called party lists.
Now we did a bit of a survey and what we found is there are 87 countries in the world with
proportional representation electoral systems. And two-thirds of those countries, two-thirds
of those 87 countries do not have a majority party. They all run along the lines of coalitions.
In a proportional system, unlike a constituency system, every vote counts the same. It's very
different from a constituency first, past, or post system. So if you live in Ruda in
Bupumalanga in a rural area or you live in a city in Cape Town, your vote counts exactly
the same. And those votes are all, doesn't matter who you vote for in different part
of the countries, it all gets added together for one party or one movement. So everybody
is represented in parliament on a basis of equal weighting of the votes. You cannot get
a situation that we had in the UK, for example, as recently as 2019, when the Tories won an
election were 45% of the popular vote, but 55% of the seats in parliament. It's a nonsense
situation. And so what did the Tories do with their 55% parliamentary majority? They rammed
through Brexit. We had a similar thing in South Africa in 1948, when the National Party
came into power and started apartheid legislation. The National Party didn't have a majority
of votes in 48. They were sitting somewhere in the 40%, but they got more than 50% of
the seats in parliament. In fact, the National Party only got a majority of the popular vote
10 years later in 1958. For 10 years, they ruled on a minority of votes, but a majority
of seats. Now that's the nonsense that you end up with in the constituency system. A
proportional system is much more representative. That's the point. And everybody gets a bite
at the apple, so to speak. So that is the system our founding fathers and mothers gave
us. I think it works well for this country. And what it also means, if we look at other
countries in the world, I don't think we will soon, I don't think in my lifetime, maybe
in young people's lifetimes, we may again see a party with 50% plus one of the vote.
But it is the exception. In a proportional system, many parties get votes and they have
to come together to form a coalition government. So I think it's quite a big change that took
place in the governments that we elect.
Many South Africans will be quite worried about this because coalitions at local government
level have been disastrous.
Absolutely. You're quite right. After 2016 and 2021 local government elections, when
we started getting coalition governments at local government level, things have not worked
out well. It was a terrible experience. Why? And I think the answer is that those coalition
parties that formed coalition governments in various municipalities focused on the who,
not on the how.
In other words, who gets the job?
Who gets the job? Who gets the salary? Who's the mayor? Who's the speaker? Who's the chairman
of committees? Who's getting the bigger package? Instead of focusing on how, how are we going
to govern? What are we going to try and do? And how are we going to try and achieve those
goals? It's a very big difference. It's a switching of the same letters, who and how,
but it's a very different outcome.
Now there's an interesting thing that happened in KZN about a year ago. The DA and IFP, in
Qatar freedom party, signed a coalition agreement for the 13 municipalities in which they had
coalition majorities. They ruled the municipality. It's a unique document in South Africa because
what did they do or what does it do? They started out by saying what their values are.
What are the things that they believe in? Constitution, rule of law, merit-based appointments,
evidence-based policymaking, items like that.
Secondly, what did they want to achieve in the five years that they formed the coalition
government in the municipality? And it's basic things like water, basic services, upgrading
our facilities and so on. And then thirdly, how are they going to do it? And for example,
one item in the how to do list is that 8% of municipal budgets will be spent on maintenance.
Now that may sound like a very sort of minor point, but in South Africa our big problem
is maintenance. And the fact that these two parties put that into their agreement and
it's part of how they're going to govern, I think is important. So we've got this agreement
encased in and by all accounts it is working reasonably well.
Now the national agreement which was signed by the ANC and the DA on the 14th of June
follow exactly the same pattern. They start with a preamble of where the country is and
I think we can all relate to those descriptions. Then they've got 10 foundational values and
that includes the constitution, rule of law, merit-based appointments, evidence-based policymaking
and so forth. And then thirdly, what they want to achieve. And there they talk about
nine priorities. So this agreement which has now been signed by smaller parties as well
is about 10 foundational values, nine priorities. So this coalition government has to work towards
that. And that's what they will do over the next five years. And I think that's an important
break with the chaos that we've seen in the past with local government coalitions.
I think it's important to note that you attached that as an addendum to the newsletter so people
can go to the website and find it.
Yes, they can. Absolutely. It's at the end, it's an addendum. It's quite interesting just
to look at those foundational values and priorities. And it gives you a feel that it's not just
airy-fairy stuff. It's very practical. It's very real.
But we all thought that those two parties, those two main parties were so far apart ideologically
that they could never sit around the same fire. And the rhetoric on both sides was fiery
to call it that.
Yeah, you're quite right. There's the perception, very widely spread and very widely held, that
the ANC and the DA are poles apart. As you know, I've never bought into that. I've always
thought that the commonalities between those two parties, they both broadly parties to
the middle. They both have their radicals. The ANC has got RDT people. Thanks to Mr.
Zuma, a lot of them have left, but they are still RDT people in the ANC. And the DA has
got its radicals. But the big critical mass of both parties are sitting in the middle.
And I've always held that view about them.
So you don't think that the ANC and the MK-EFF combination are better bedfellows?
No, absolutely not. If you look at policy and you're concerned about policy, then there
are bigger differences between the ANC and MK-ANC-EFF than ANC-DA. Let me give you a
few examples. MK is very clear. They want to abolish the current constitution. They
want to go back to the old South Africa arrangement where parliament is the sovereign authority
in the state. Parliament makes a law, then that is the sovereign authority. Under our
constitution and Bill of Rights, the constitution is the sovereign authority and it's applied
by the constitutional court. It's two very different positions. And it's clear where
the ANC is coming from. It's equally clear where MK is coming from. They're very much,
much further apart than the ANC and the DA on that point. If you look at the EFF, you
find a similar thing. The EFF is in favour of all land in the country. All property must
belong to the state and the state will then dish out property, houses, buildings, farms
and so on to whoever they deem appropriate. The ANC's position is exactly the opposite.
The ANC's position is that land is a, individual citizens have the right to own their own land
directly, i.e. they can have title deeds. And that's why you see a constant effort,
particularly at election time, where the ANC dishes out title deeds. Very different from
the EFF. So no, those two parties, MK and EFF, are both offspring of the ANC. That doesn't
mean they're the same as the ANC. COPE was an offspring of the ANC and look where that
is. Bantu Hulamisa's UDM is an offspring. Look where that is policy-wise. No, I think
the reality is if you look beyond race and you say it's not just about where the parties
are black, whether they come from a black constituency, if you actually look at policy,
those parties are further away from the ANC than what the DA is.
What do you make of talk about a national dialogue in the near future?
That is one of the elements covered in the agreement that all the parties to the coalition
agreement commit themselves to have such a dialogue. So I suspect we will see action
over the next year. It's an idea that was launched by Talbot Mbeki just before the election.
And the idea is that you try and develop a national consensus between everybody, white,
black, old, young, business, labor, employed, unemployed, small business, big business,
on where the country must go. It's really an issue of social capital, social cohesion,
unity of purpose. Now, this is a noisy country. It's a noisy democracy. We've got many, many
old players, many of them punching way above their small weight. So whether you can pull
off such a national dialogue, we'll have to see. But that is future music.
So what do you see happening when it comes to appointment to who gets the jobs?
Well, the president must be in terms of the constitution section 87, I think, must be
must take office within five days of his election. He was elected on Friday night. So it's Saturday,
Sunday, Monday, Tuesday, Wednesday. So Wednesday the 19th, he must be inaugurated, assume office,
that'll take place at the Union building since Rwany. And then there's no stipulation on
by when he must appoint a cabinet, but obviously he must then appoint a cabinet.
And that's his prerogative.
That's his prerogative. There's no time stipulation in the constitution. But I think the expectation
and the political pressure is such that he will move. And there are some suggestions
that he will do it by Friday the 21st. Let's see. Let's see. So that is as far as appointments
go.
Indications of who will be in that cabinet?
No, no, I have no idea.
So I can't
Not even party affiliations?
Well, party affiliations will certainly play a role. In fact, it is in the agreement that
although it's the president's prerogative to appoint, he has to give due consideration
to the seats that parties got in the national parliament. So it will follow more or less
the party composition. I think you can say that the president can appoint two ministers
and two deputy ministers from outside parliament. And we'll have to see whether he makes use
of that freedom.
Economic policy? Do you see any changes?
No, I don't see any changes. I think on economic policy, you can summarize it in one word.
The word is vulandlela. Vulandlela means opened away. And this was started way back by the
president and way back when Titumu Buwini was minister of finance. This unit, vulandlela,
has become a permanent unit inside the presidency. And they've scored significant policy victories.
For example, spectrum release, which was delayed for 10 years under the previous president.
Eventually they pulled that off and spectrum was released and we've got a new, as you know,
a new dispensation. Secondly, energy, electricity. Electricity has been turned on its head, driven
partly by the crisis with load shedding years. But you know, it's not good enough just to
have a crisis. You must also have a way out of the crisis. And that's what vulandlela
gave in electricity. In visa reform, we have seen recently announcements around making
visas easier. So, vulandlela scored a number of important victories. It's an important
institution, informal as it is. Now they focused on water, ports, railways, railway infrastructure.
Those are the three main areas now where they're focusing. Now, the president has made it clear
in a letter which he published after the election, but before his election in that two week period,
he made it clear that it is absolutely imperative that this program of vulandlela carries on.
It's a program of deep structural reform that will change the country quite fundamentally.
And the DA has also expressed their support, not so?
The DA is absolutely on side. It fits into what they also would like to see. So yeah,
I think the two main parties are not going to jeopardize the implementation of railway
reform, ports reform, water reform, and so on.
And then in the last two weeks, there was a report from the Bureau for Economic Research
at Stellenbosch. Very interesting.
Yeah, very interesting. Also interesting politically in the fact that the president quoted it by
name in his letter and what the Bureau for Economic Research do. The researchers there
asked themselves the question, what needs to be done to change South Africa from a one
and a half percent growth economy? One percent, if it's going well, we grow at one and a half.
What can we do to change from a one and a half percent growth economy to a three and
a half percent growth economy? And the relevance of those numbers are simply that population
growth is 1.8. If you grow at one and a half, you're getting poorer. You're making more
babies than what you're creating economy. On the other hand, if you grow at three and
a half percent, that's almost double 1.8 percent population growth. Now you're cooking with
gas. If you can carry on with three and a half percent versus 1.8 percent for five years
or 10 years, you really change the country. That's what South Africa did in the first
20 years of democracy. Economic growth far exceeded population growth and that gave you
a substantial period of progress. So what the Bureau for Economic Research found in
their work is that if you want to change from a one and a half percent to a three and a
half percent economy, you don't have to do anything new. You don't have to do anything
different. We don't need new policies. All we need is an energetic implementation of
the Voluntary Lela program. So that's where economic policy will be after the election.
It was also interesting to hear the references to the National Development Plan over the
last while, because the National Development Plan was first published in what, 2012? And
it seemed to have faded for a while, but it's now being brought. And as you say, the BER
now came to the conclusion, we don't need new plans and new policies. We must just do
what we said we were going to do.
Yeah. I wouldn't put that much status on the National Development Plan. You're quite right.
It has been referred to. It has been referenced more. But I don't think, as you know from
the work that I've done at the National Planning Commission, I don't think there's a government-wide
commitment and embracing of the National Development Plan. So I think Voluntary Lela is much more
concrete. It's much more measurable. It's much more definite. And that's where I'm going
to focus my work over the next year or so.
What do you see happening as far as the budget's concerned?
On the budget, I think it's quite clear. I hope, I don't know, but I hope that the current
Minister of Finance, Eno Konugwana, will be reappointed. He's made it quite clear that
he's not going to step away from bringing down South Africa's debt to GDP load. In fact,
in this current year's budget, the year in which we are now, which will end on 31 March
next year, he has penciled in an amount of more than $60 billion as a primary surplus.
Now, a primary surplus simply means government has more income than expenditure if you exclude
interest expense. And it's a vital tool that you need if you want to start breaking down
or moving down your debt to GDP ratio. We had a primary surplus in this past year for
the first time in 15 years. So the minister has done it. If you look back, he's penciled
it in for this year, and I think he will stick to that policy. And as the debt to GDP ratio
comes down, interest rate pressure will come down, and in general, things will improve.
Now, currently, debt to GDP is sitting at about 74%, and the DAE has formally proposed
to the coalition government that they would like to see a level of 67%. So that's clear
where they're standing. So I think there's broad agreement, and that's the way the budget
will go.
What happens when there are disagreements, as surely there will be?
Then there are mechanisms written into that agreement between the DAE and the ANC, well,
all parties to the government of national unity, on what must be done to solve disagreements.
There's a process of talking, and then eventually, the final step is sufficient consensus, and
sufficient consensus is defined as 60% of 60% support in parliament. Now, of course,
the two big parties, DA and ANC, make 60%. So that's the way you will move forward. And
I think, Ruda, what we have to accept, we must now get out of the mindset of having
a majority party who can decide alone, and that's the end of the story. But we must also
accept that if you're the minority party in a coalition, that doesn't mean you can dictate
what must happen. Everybody will have to compromise. And that's when I think one of the foundational
values of evidence-based policymaking is an important point, because when you then have
disagreements, you can say, right, let's get in the experts, let's get in the hard data,
and see what should shape the decision that we have to make.
I'm quite sure the one thing that South Africans are good at, we make a hell of a noise, but
once we're in the room, we actually compromise. We've got an ability to make deals. That's
how the new South Africa was built. So I'm not too worried about that. There are processes,
you work through the processes, you overcome your differences.
Doesn't the phrase sufficient consensus come from 94?
Exactly, exactly. And now the phrase is back. It gave us the constitution, it gave us the
democracy, and it will play its role now as well in the coalition government.
Might we see movement in local governments before the next local government election,
which is what, 2026?
Oh, absolutely. You'll see that before this podcast goes out. We've already seen it. The
ANC has recalled that rather suboptimal mayor that was in Durban, he's been kicked upstairs
to the National Council of Provinces. You can go sit there and it's Hillary. He's been removed.
The ANC mayor of Ekorilei has also fired the EFF council responsible for finance. He was
only appointed a few weeks ago when there was a temporary coalition agreement.
Just for the weekend, no?
Yeah, it was more or less two weekends. So, and I think you're going to see them much
more. I think what's going to happen in the next couple of weeks is that coalition governments
across the country, where the ANC and the DA are not working together, but they are
in partnership of all kinds of funny small parties, that will be cleared up. You will
get coalition agreements between the people who serve in the government of national unity.
That means it'll affect Nelson Mandela Bay, it'll affect Johannesburg, it'll affect Ekorilei,
it'll affect Twane, probably Tehkwini as well. A number of municipalities, I think, will
get onto a new trajectory and that should make a difference, at least in some local
governments.
So, in summary, so what?
I think, first of all, it is quite a thing that happened, that the ANC lost the majority
that they had for 30 years, that they accepted it and that they moved to a new dispensation,
a new governance dispensation within two weeks. I think that's a phenomenal performance. As
I've said, it didn't even happen in America in 2020. We will see what happens this year
in America, but for the South Africans, it's a point of pride and something we can feel
very good about. On matters economic, it is quite clear that the middle has been strengthened
considerably. This pseudo warfare, this phony war that we had between the DA and the ANC,
which I never bought into, as I've said, that can now be set aside and you can, like
adults, talk about what needs to be done to grow the economy.
The third, so what, is it would be wrong to say that the DA will stop transformation in
the country. That is the general accusation which is against the DA. But if you look at
the foundational principles which were signed by the DA, those foundational principles are
very clear that we have a particular legacy in this country, that we have to overcome
that legacy and that that requires specific proactive measures. That's also, by the way,
not just in this national agreement, it is also in the agreement which the DA signed
to the IFP in KwaZulu-Natal a year ago in respect of local government. So it's not a
new idea. I don't see any stop to the process of making the economy more inclusive to black
people taking steps necessary to overcome our past. And I think those two things, much
higher economic growth, much more inclusion, that will dominate for the next five years.
And then I think the big so what is that we've seen a substantial move to the middle. Yes,
MK did quite well and kudos to them, but Julius Malema was cut down and he moved from an 11%
party to a 9.5% party. He must be terribly disappointed. He's been repudiated clearly
by the country. MK did only did well in KZN. I think they've got a little bit of support
in Mpumalanga and they've got one member of parliament in the free state. So for me, the
majority of people in this country actually do not want radicalism. They don't want right
wing radicalism and they don't want RET radicalism. So there's a coming together in the middle,
which I think is absolutely great. And your last point is there's hope for local governments,
which makes me very happy. Yeah, I think we will see a reorganization of local government,
a political reorganization, whether that then feeds through quickly into better bureaucratic
performance, better service delivery that we will have to see. But at least as a businessman
has remarked in this case of Johannesburg, fix the politics and then you can start fixing
the city. And at least now we're busy fixing the politics. So we may see improvement in
the city service delivery as well. Thank you very much to the listeners. Thank you for
your time, for your attention. Enjoy this breath of fresh air that is blowing through
the country and stay warm. Indeed. Thank you very much. Thank you for listening to the
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