Doomsday Smileys [COLUMN]

Hilary Joffe's Business Day article sets the tone for the economic mood of South Africa right now.
She writes:

...the new administration should not underestimate the time and effort of merging and splitting and creating departments: the danger it has to try to avoid is that it might spend more time restructuring than actually doing anything. There’s no question that would be bad. For business and for everyone else.

We don't know how much influence Trevor Manuel will have in the new administration. What we do know is Manuel's role, after over a decade of successfully managing the country's finance, is being shifted. Zuma has made it clear that Trevor Manuel will not be responsible for formulating economic policy. In a confusing contradiction it turns out that Manuel has an even grander role, which is:

...to develop the government’s “entire national plan”. Manuel’s job [is] an “important one”, and would relate to the government’s “entire programme of action” including the economy.

There are, of course, a couple of ways to read this double speak. Firstly, if it ain't broke, why fix it? Manuel's done a successful job, so why fiddle with his portfolio? On the other hand, it's possible, though I admit not terribly likely, that Manuel himself asked to be shifted slightly out the door. Why? Because Manuel has already expressed the feeling that he can't serve forever. And while we may sing Manuel's praises till the cows come home, it is also true that probably, under pretty much any finance minister, South Africa probably would have grown economically anyway given the macro-economic [that is global] fundamentals in play. Because, of course, over the last decade or so almost every country in the world has grown a lot wealthier.

Of course economic prosperity is now past its zenith, and Manuel probably knows this. It is always good to retire on the money, a winner, and it is not difficult to read the signs. Recession is manifesting in the world's biggest economy in a big way. House prices are crashing 17% year on year, and 1 in 5 Americans are likely to lose their homes. That's a lot. That's bad. And there's a lot more bad weather in store. Swine flu may actually worsen an already fragile scenario, but let's keep things simple (and safe) for the time being.

Personally, my concern is Zuma's attempt to centralise economic planning. The excuse is that it was in disarray, but to bring economic power under a command/control administration offers the ANC a railway line into the treasury. If conditions sour in South Africa, and they almost certainly will as global economics deteriorate, it will be as easy as pie for the 'right' hands to pilfer public coffers. That is, more than is already the case. No one has done this better than Robert Mugabe, and there must have been some surreptitious note-taking on political self-enrichment here, on home soil.

Meanwhile, Helen Zille, leader of the opposition DA has echoed some of these sentiments, saying:
"With few exceptions, President Jacob Zuma's new Cabinet is bad news for South Africa."

Zille rightly points out that the size of government has swollen. There now 34 ministries. And she cites the changes to the economic ministries as crucial. Of course they are.

Of particular importance was the creation of a National Planning Commission based in the Presidency, Zille said."While the DA welcomes the appointment of Trevor Manuel as the head of the commission, we will fiercely resist any attempts by this Ministry or the newly created Co-operative Governance Ministry to undermine the constitutionally entrenched autonomy of the three spheres of government."

"We will also watch two critical new appointments very closely, namely that of Ebrahim Patel as the head of the newly created Ministry of Economic Development and that of Pravin Gordhan as the new Minister of Finance.

Zille went on to criticise the changing of portfolios for Barbara Hogan - from health to public enterprises. This is a tough one to call. It is difficult to say which is more crucial to a nation's well being, the ability to render essential services (electricity and energy) or that the nation be able to maintain a minimum level of health services. It seems to me that public enterprises is the more crucial of the two, however I have no idea how informed Hogan is on energy matters. This is a more subtle and more difficult area than most people are aware.

"Blade Nzimande, as the Minister of Higher Education, is a Marxist ideologue, whose appointment raises concerns about the future of higher education in a global knowledge economy."

Zille said the DA was relieved that there was no place in the Zuma Cabinet for a number of ministers from the previous administration, Manto Tshabalala-Msimang, Ngconde Balfour, Mandisi Mpahlwa and Charles Nqakula, whose tenures were "nothing short of disastrous".

"It is however, lamentable that Nosiviwe Mapisa-Nqakula has been shifted to the critical portfolio of Correctional Services when her time as Minister of Home Affairs saw her lurch lethargically from one crisis to another."

One of these was the appointment of Susan Shabangu as Minister of Mining. Mining was a critical industry for South Africa's long-term economic growth.

While there seems to be some accountability going on (Manto Tshabalala-Msimang thrown out, for instance), what we're seeing is far from a sane, strategic deployment of talented people. Hogan's role change alone shows a worrying degree of petty politicking. I believe this cabinet will be villified very quickly by an increasingly belligerant public. I believe Zille's voice of reason will fall increasingly on receptive ears. But it remains to be seen whether there is a functional democracy in this country after all. Yes we went to the polls. Yes it was peaceful. But all that was preceded by constitutional ploys and dishonesty, and it is hard to imagine that Zuma will own up to any mistakes in future. Probably, he will form an inner circle of trusted lieutenants, and as conditions outside of that circle worsen - as they certainly will - that inner circle will be made more and more secure, and immune to the vaunted cries, appeals, to the baying public.

I hope I'm wrong.

On the bright side though, South Africa does need to turn a microscope onto the poor communities. They need serious attention. Zuma may do better in this area than anyone.

On this point, I hope he does, because in doing this he may well redeem himself.