Since the elections we have jumped over one of the two big hurdles on the way to trying to halt our descent.
This was whether or not the ANC would be prepared to accept defeat. On Sunday, 2 June, President Cyril Ramaphosa went on TV to say his party accepted the election result. It meant the ANC did not contest the loss of their majority. That is important because it had never happened before. It also meant there would be no dispute over the result, at least from the largest party. And it meant no national crisis.
The second hurdle is whether or not the Government of National Unity (GNU) can change our dismal economic growth story. Will the ANC be prepared to let go of much of what it thinks it needs for support and patronage, and its ideological bearings?
I missed the big takeaway from President Cyril Ramaphosa’s speech at the results centre set up by the Electoral Commission of South Africa (IEC). Here was the ANC accepting that it had been defeated and it was not questioning the result of the election.
There has always been a bit of a doubt as to whether the ANC, which has had a dominant position for 30 years and is seen by Marxist-Leninists in its ranks as a vanguard party and the natural leader of the people, would accept the loss of its majority.
Rule book
Now that it has happened, there is no doubt that the ANC is prepared to play by the democratic rule book.
Losing a majority, but remaining in a coalition-type arrangement rather than actually being thrown out might make it easier for the ANC. But it has still accepted a reduced role. How much of a reduced role will be forced on it is open to question. This will be tested in the upcoming GNU.
The second hoop is a two-part test of whether the coalition will be stable and whether it can put the country on a growth path.
There is a lot that could go wrong, and only a limited number of things that could go in the right direction.
We still do not know which parties will make up a Government of National Unity (GNU) proposed by the ANC.
The Economic Freedom Fighters (EFF) and uMkhonto we Sizwe (MK) have rejected the President’s invitation to join a GNU. The Democratic Alliance (DA) has consistently said it will only join a coalition to keep the two ANC breakaway parties out of the government. So the two breakaways have done a favour to the DA by not wanting to join. And the ANC has not been put in a position where it has to choose between its breakaway fellow Comrade parties and the DA.
But what if at a later stage, MK and the EFF change their minds and want to join the coalition? Would the DA leave the GNU or would it have a veto over their joining?
Coalitions tend to last when the members are not separated by vast gaps in their ideologies. In Germany, most coalitions have been grand coalitions of two parties that are ideologically close. This will not be the case in a coalition in which the DA and ANC are members.
The DA has consistently opposed legislation that is key to the ANC project, such as National Health Insurance, the Hate Speech Bill, and Expropriation without Compensation.
Differ fundamentally
According to the Sunday Times, the ANC will not allow any changes to Black Economic Empowerment and the labour laws as part of a coalition arrangement. And the ANC is not about to drop its case against Israel in the International Court of Justice or its attitude towards Russia and China. The two parties differ fundamentally on cadre deployment in the civil service, bailouts for state-owned enterprises and much else. How can these two parties possibly come up with a legislative programme?
The DA has laid down six key principles for its participation in a GNU. These show there could be some shared ground.
They include the continued independence of the Reserve Bank, protection of the Constitution, a sustainable fiscal framework, and the creation of a corruption-free civil service. And both agree that the government’s Operation Vulindlela reforms proposed by Tito Mboweni when he was Finance Minister in 2020 should be continued. These aim to turn around Eskom, and improve the water supply, transport and telecommunications sectors. That means they could come up with a restricted joint action list.
It will be a new game for all the parties in the ANC-led GNU. On its own, a withdrawal of the DA is unlikely to lead to the collapse of the GNU, as the ANC might still have support from a sufficient number of smaller parties. That gives the DA a restricted leverage over the coalition. But the DA can still bring some pressure to bear, even if it is only asking for the faster implementation of reforms to which an ANC government has agreed. That could also give the coalition a degree of stability in the face of strong pressures to break it up.
If it is to last, the coalition will have to have a ‘stay in your lane’ agreement between the parties. As the largest party, the ANC would probably get Foreign Affairs, Defence, Treasury and others, while the DA would get the industrial departments like Minerals and Energy and Public Enterprises.
Big test
The big test of the GNU will be whether it can get anything meaningful done to boost economic growth. It’s hard to see the ANC-led GNU as being able and willing to implement the full package of reforms that we need for growth. A comprehensive reform package for growth will have to restore a degree of confidence, and that requires the ANC to agree to scrap the National Health Insurance project, give up on Expropriation Without Compensation, and allow privatisation.
We might see the coalition carry out much of the Vulindlela agenda, but the prospects for the implementation of a fuller package are remote.
But we could be surprised, as coalitions can be good for reform. In India it was a series of coalition governments that appeared weak at the time, but initiated and continued with reforms, that paved the way for the country to become the world’s fastest-growing economy this year. In 1991 the coalition led by Prime Minister PV Narasimha Rao of the Indian National Congress party got rid of many import restrictions, liberalized the exchange rate and capital controls, and boosted trade by joining the World Trade Organization. Narasimha Rao’s reforms were the result of a foreign exchange crisis, rather than any long-term plan.
Let’s hope that the South African reforms can be carried out by a coalition government in the absence of a crisis.
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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Image by Jürgen Bierlein from Pixabay