23 March 2012

JOHANNESBURG -- I’ve been in South Africa this week to report on the country’s political and economic prospects. Verdict, in the words of my old school reports: Could do better.

In theory, this should be a country with just about everything going for it. A wealth of natural resources (including gold, platinum, chromium, and diamonds); a relatively well developed infrastructure, and an industrial base which should be perfectly placed to grab the opportunities offered by rapidly expanding markets elsewhere on the African continent.

So why isn’t it happening? Well, up to a point it is. Current economic growth is around 2-3 per cent a year, which by UK or Eurozone standards isn’t so awful. But compared to South Africa’s emerging economy competitors (it’s now joined Brazil, Russia, India and China in the so-called BRICS group), it doesn’t look quite so impressive.

The official unemployment rate is around 25 per cent, but among young South Africans it’s closer to 50 per cent (which, as the finance minister Pravin Gordhan gently reminded me in an interview, is about the same level as it is in Spain).
Take the economy first. Unlike India, South Africa has not been able to cash in on the IT revolution. Unlike China, it has not set itself up as the world's producer of everything from children’s toys to plasma TV screens. Unlike Russia, it has not banked billions of dollars in revenue from oil and gas reserves as prices rocketed.

And unlike Brazil, it has not put in place a structured welfare system designed to pull millions of its poorest families out of poverty. The squalid townships which grew up under the old apartheid system are still there, as grim as any slum or favela in Brazil, India or China.

The economic analyst William Gumede argues that the post-apartheid government wrongly concentrated its efforts on what it called “black empowerment”, offering advantages to black-owned companies to enable them to compete more successfully against their white-owned rivals. What that policy did in effect, he says, was to empower people who were already empowered: the educated middle class, and those who had connections to the ruling ANC.

What it didn’t do was help the people at the bottom of the pile, by providing basic welfare programmes and decent schools. As a result, South Africa has now replaced Brazil as the country with the widest gap between rich and poor.

None of this is to say that nothing has changed for the better over the 18 years since apartheid was finally laid to rest. Even in the townships, there are now paved roads where before there were none, and millions of people have access to basic essentials like water and electricity where before they did not.

But it comes at a price. Just this week, there were violent protests against the privatisation of water and electricity supplies, with providers now installing meters and demanding payment upfront. Campaigners claim too many people are being cut off for non-payment, and too many bills are based on inflated usage estimates, because the companies aren’t bothering to read the meters.

So what about the politics? After the heady days of hope when Nelson Mandela was president and guided the country through a peaceful transition to majority rule, today South African politics are not a pretty sight. (Yes, I know that’s the case pretty well everywhere, but here the contrast is so much greater than elsewhere.)

The president, Jacob Zuma, is enmeshed in corruption allegations, as he has been since before he took office three years ago. He’s under attack from left-wing critics in his own party, particularly from the ANC’s traditional allies in the trades unions, and from the Youth League, whose president, Julius Malema, has been expelled from the party.

There’s an ANC leadership election due at the end of the year, and behind the scenes there’s talk of Zuma’s party critics manoeuvring to have him ousted by his deputy, Kgalema Motlanthe. Whether the party is ready to turn against yet another leader (Zuma’s predecessor, Thabo Mbeki, was removed in a party revolt in 2008) remains to be seen.

The biggest complaint about the ANC that you hear in the townships is that the party has broken its promises to deliver basic services, affordable housing and jobs to those who need them most. The response from the finance minister, Pravin Gordhan, is that you can’t undo the damage caused by 300 years of white minority rule in a mere 18 years.

But if you add to the disappointment over broken promises the constant swirl of allegations of corruption and cronyism, then you have what could become a combustible mix. The ANC still wins about two-thirds of the vote in national elections, but the numbers are falling – and it knows it won’t go on winning for ever.