Poor Leadership and Conservatism Within South Africa's Body Politic

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access

Research article

POOR LEADERSHIP AND CONSERVATISM WITHIN SOUTH AFRICA’S BODY POLITIC: ILLUSIONS OF POWER PERPETUATED BY THE RULING PARTY

Anis Mahomed Karodia (PhD)

[email protected]

Professor, Senior Academic and Researcher, Regent Business School, Durban, South Africa

Paresh Soni

Institutional Researcher, Management College of Southern Africa (MANCOSA), Durban, South Africa. [email protected]

Stanton Thomas

Research Administrator, Regent Business School, Durban, South Africa

[email protected]

______

ABSTRACT

The paper attempts to focus on the issues identified in the title of the paper. These are complex but important issues for South Africa after twenty years of freedom and democracy, post 1994. The paper argues that leadership in South Africa is in the main disconnected from the realities of securing the so – called developmental state. It is a question of leadership that is not coming to the fore in order to secure this objective and goal. The second issue that the paper highlights and discusses is the all-embracing fact that the African National Congress as the governing party and its rich and historic liberation struggle has become a harbinger of conservatism with a drift of the party. Thirdly, the paper dissects a discerning citizenry in public culture that is required to counter self – deception endemic in the ruling party. Against this background the paper shows that there are cracks that are widening between executives

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access and workers in respect of remuneration in South Africa that is essentially a “third World‟ developing country and this disparity has reached vulgar levels. The rise in the public sector wage bill is frightening and needs to be controlled, if service delivery is a priority. Given these scenarios, the paper concludes with a discussion on the South African civil service, its importance to the state and the country, but more importantly argues that the economic crisis has forced the South African state to become the biggest employer. It also argues that this bloated civil service is inefficient, primarily due to the government being unable to deal decisively with poverty, inequality but most importantly deal with rampant unemployment in South Africa.

Key Words: Leadership, Conservatism, Liberation, Executive Remuneration, Civil Service, Employer ______

INTRODUCTION

In a paper of this nature, it is important from the South African perspective to introduce and discuss briefly the problems of leadership and the overt disconnection with this leadership. In this regard, as it pertains to the developmental state that the South African government is in pursuit of, it becomes necessary to understand these issues. In order to create a developmental state that is vigorous, one that can meet the imperatives of the state and its people, given the rampant and widening inequality, the increasing poverty, and massive rising unemployment, exacerbated by a 0.2 percent growth rate, which in real terms at the moment, is a 0 percent growth rate, which has forced the Reserve bank to stall the increase in interest rates, in order to lessen the burden on the majority of poor people. All of this has to be couched in human terms, a desire to succeed with a great deal of determination, given the fact that the African National Congress was again voted into power, at the National elections held on May 7, 2014. However, there are few signs at present that the government has the leadership to make things happen, in order to redress the imbalances over the first twenty years of South African democracy. It is against this background that the issues raised in the title of the paper, will be discussed and nuanced.

ON LEADERSHIP

It is now widely understood throughout the country that failure to boost the economy will lead to more instability, given the failure of government to deal decisively with the economy. Relatively minor reforms only feed the appetite of the masses for more, creating “what sociologists refer to as “relative deprivation and according to Ben Turok (2014: 4), the most likely condition for revolution is not when the economy is at rock bottom, but rather when things begin to improve, and the masses sense that change is possible. That mood stimulates the desire for more, especially with evidence of increasing wealth for the middle strata and those above staring the poor in the face. The memory is still afresh of the social solidarity in the years when making South Africa ungovernable was the cry of the poor and in the townships. If the memory is not given scope for transformation, it could turn destructive.” There is no doubt that in the recent past the African National Congress has been infiltrated by opportunists and corrupt elements, but a substantial number of core and decent cadres remain. On the other hand we see that tried and tested members of the ANC who fought the liberation struggle have been deflected and lured into the lager of vulgar capitalistic attitudes at the expense of the poor and have been involved in corrupt activity and have amassed vulgar wealth. This does not augur well for the organization and, points to the erosion of the values of the ANC and further points to a complete lack of trust in them by the masses and speaks ill of their revolutionary credentials, and exacerbates the crying need for strong and decisive leadership within the organization.

An activist and committed core of cadres at ground level depends on sound leadership in every sense of the word. A leadership that resorts to manipulation and deployment of favoured people will not maintain the respect of the ordinary cadres. Equally, manipulation of deployment in the public service leaves the public confused, annoyed and

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access demotivated. While selflessness and commitment to the public good are so important, manipulation leads to defeat and alienation. Turok (2014) further states that “the booing that greeted President Zuma at Mandela‟s funeral service in Soweto (One of the seats of resistance during the apartheid era) was a telling indicator of dissent from below and the extraordinary measures taken to screen and control when the ANC released its election manifesto in January in Nelspruit may be a measure of how uneasy the leadership feels in the face of popular dissent.” The May 7th election has passed with a victory for the ANC albeit with a slightly reduced majority. The time has come for the ANC in the next five years to heighten discipline, remove cadre deployment, corruption, nepotism and patronage and concentrate in terms of meeting the aspirations of the people, deal decisively with unemployment, poverty and rampant inequality. If it does not, it would sooner or later face the same fate as India‟s Congress Party in the coming two elections as opposition parties gain ground coupled with the rising anger of the masses of poor. In this sense, the ANC has to invoke the principles of sound and decisive leadership, if it wants to survive the toxic political environment in South Africa.

ANC CONSERVATISM

African National Congress (ANC) ideologues, comrades, protégés and revolutionary stalwarts extol the virtues of their historical past in glowing terms. No South African will deny this for one moment, but the legacy of Nelson Mandela, Walter Sizulu, Govan Mbeki, Yusuf Dadoo and a host of other moral and outstanding leaders within the ANC of the past, has been rapidly eroded in the first 20 years of democracy, irrespective of the party having won the May 7 2014 general elections. Political patronage, overt corruption, nepotism and sleaze reigns supreme under the current leadership of the ruling party. Unemployment, poverty and inequality are the order of the day. This stymies development and has negated democracy and the revolutionary credentials of a revolutionary party. The character, values and moral compass of the ANC has been eroded almost to a point of no return. Does the ANC still remain the most viable vehicle for social transformation in South Africa? More importantly as matters stand today is it possible to raise matters for debate and correction within the ANC or if it is done what will be the outcome to challenge the ANC by ordinary members, society at large and by academics, scholars, and those that disagree with its policies and poor governance track record post 1994? In this regard Barney Pityana (2014:4) points out interestingly that “there was no effort to defend the Nkandla debacle (a debacle in which the President of the country is involved) and to explain the shenanigans in the so – called security upgrades that caused the project to escalate to some R206 million rands of South African tax payers money. The view is expressed that the Nkandla (Home of the President in rural KwaZulu – Natal Province) is not a crisis and that revolutionary strategy and tactics would be enough to guide comrades on how to approach the present crisis.” In other words, it has lost the moral high ground because the ANC speaks to itself and its words bounce back on itself. This is the reality of ANC politics today.

All of this happens outside the structures of the ANC because the ANC according to Pityana (2014) “because the ANC has been captured by a cabal that has turned it into an instrument of self – enrichment and for control of the state – not for the common good, but for personal benefit. The result is that the ANC is no longer an inclusive organization, it is not a debating chamber, it no longer represents its liberation credentials, it no longer can claim the legacies of its revolutionary stalwarts and great leaders, and it is no longer a place of ideas or a form of ideas battling with ideas. It is not an inclusive society conscious of its moral responsibility for the wellbeing of South Africans.” It is thus not the only vehicle for radical social transformation because, it has become in the space of two decades since 1994, has become involved in die – hard conservative politics and, this makes it difficult for people with a moral compass to find a home within the ANC, because its message is one of enrichment without conscience. There is a drift of the party to the right that can be seen vividly and across the political spectrum. This is exemplified by blatant corruption, with no checks and balances, nom punitive action, the defiance of austerity measures put into place by the former Minister of Finance, lavish parties whilst the poor go hungry, decadence, hedonistic traits are openly displayed by the ruling class in general, at all levels of government, amidst a sea of poverty, inequality and unemployment.

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access

There is impatience in the South African air impatience with the ANC government and its disconnected leadership because people have lost faith in its ability to reform South Africa, in spite of the majority voting it in power again. The people have basically voted for the ANC given its liberation and struggle credentials coupled with a lack of a viable opposition, voted on the basis of emotion, but there will come a time soon, like we have seen in India, when the masses rise to oust those that fill their own pockets and have no desire of improving the lot of the poor and no desire to promote the general welfare of a people crying out for basic services in order to consolidate a developmental state. This movement has been stymied by the ruling elite which cannot move decisively away from the apartheid – induced social constructs and therefore cannot engineer the requirements needed for a crying need for a fundamental change. Pityana, in this regard states that “the concern is about living comfortably with transformation that does not touch the fundamentals but makes apartheid fundamentals more efficient and aims to reach further than apartheid did. For British historian Raymond Williams (In Pityana, 2014) “this is a transformation engineered by political methods directly contrary to the values at which transformation aims.” This must be a sobering though for the ANC – led government and a dilemma for many South Africans whose faith had historically lied with the ANC as the vanguard for fundamental change in South Africa. There are instances in ANC rule that negates freedom because of the violence of the police sanctioned by the government on the basis of a reckless disregard for the law and human life. Some of the laws the ANC government has allowed through Parliament were it is in the majority entrenches an undemocratic system in many spheres of public life and thus gives it legal credence through the processes of entrenchment of laws in an undemocratic manner and system of governance.

Pityana (2014) states and points out that “Under the ANC government, the country has an entrenched Bantustanisation through affinity with traditional leaders, appointments and by spatial geography that has become entrenched in law. The ANC itself has become so tribalised.” Apartheid is alive and well when one takes a look at the roll – out of housing for the poor, RDP houses in ghettos as in apartheid – style group areas. The policies of the ANC government “have been less about empowering the women and the poor, especially in rural communities, and more about enriching the few at the expense of the poor” (Barney Pityana, 2014: 4). There is a deeper malaise in the philosophy and practice of both government and governance principles. There has to be a rethink by the ANC and if it does not change its policies and actions the economic decline will be permanent and therefore the economy has to be taken back from the ANC and therefore democracy from without becomes important for South Africa and for South Africans.

SELF – DECEPTION OF THE RULING PARTY

South Africa is no longer what it was in 1994 at the dawn of liberation and democracy. The identities of South Africans have changed. The all-embracing fact and reality is that South Africa has become far more corrupt than it was in 1994. The country is not better run by the ANC of 20 years ago and since the dawn of post-apartheid democracy. It must acknowledge and take responsibility for the behavioral and structural corruption that has overtly taken root during its 20 years of national governance. In this regard Ndebele (2014: 1) says that “The rot has gone too deep, the culture of secrecy and the demise of democratic accountability is stark within the ANC and that, the decline has become irreversible. In its manifesto, the ANC does not mention once the decline of the state of governance as one of the core indicators of corruption. In fact, it does not refer to governance or for that matter the national Constitution. It is more accountable to itself, to the party constitution and not to the people of South Africa. It is also significant that the ANC recognizes only guilt established in a court of law, and accords no importance to moral and ethical values and conduct as a requirement for public office.”

ILLUSION OF INNOCENCE

In reality the President of the ANC, who is the president of South Africa, also, has successfully avoided having is guilt of innocence established in a court of law over hundreds of criminal charges against him, and so is the case

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access with other senior members of his party. They all exist in a state of continuous unproven innocence. This is the reality of the political landscape of South Africa at present. This culture permeates the core of government and does not augur well for the country in respect of its development. It has been pointed out by numerous political commentators that the “ANC has thus become legally and behaviourally adept in defeating the ends of justice. Sustained unproven innocence soon transforms into the illusion of innocence. It is this illusion that has over time, eroded ethical and moral sensibility within the ANC. This condition has become the organization‟s dominant mode of perceiving reality. The combination of the culture of unproven innocence and the supremacy of its constitution over the national Constitution indicates an organization that has installed itself in the place of the nation. If the ANC is the nation, an entity logically and existentially much bigger than itself, then that nation could never aspire to be more than a smaller part of itself” (Karodia, 2008 and 2013).

In this regard Ndebele (2014: 1) states that “What is universal then becomes encapsulated in the particular. A nation that allows such a condition has only one fate: death by asphyxiation and this speaks to the fundamental contradiction in the ANC‟s “commitment‟ to fight corruption, especially when considering how corruption is embodied in the organization‟s leadership. This is what the ANC has become and this does not and cannot lead to successful transformation of the country.” There is thus a mass psychology of denial within the upper echolons of the ANC party leadership, that there is nothing wrong and that all is well and that, it is being unfairly criticized by the opposition, the media, regional leaders in Africa and indeed the world.

The fundamental flaw in ANC reasoning is the reality that it is in a state of denial and its inability to acknowledge the rot within itself. The electorate is thus unable to reflect rational behaviour which is exemplified by blind loyalty because of the ANC‟s revolutionary credentials, by emotion, fear and the like due to ruling party propaganda. It thus seeks to create a feel; good sense in the public domain in which the invisible prize is the consolidation of corruption. As Ndebele (2014) rightfully puts it “the time has come for the people and the masses to liberate themselves from the liberator.” The citizen must decide, the citizen must allow for his / her voice been heard, the citizen is the custodian of democracy and to this end the citizen must hold the government accountable for its actions.

THE AGE OF HENCHMEN

The world including South Africans will recall the Guptagate scandal, the Nkandla scandal, the Public Protectors findings against the President and, many other scandals, in respect of the indiscretions of the President of the country. We saw how cabinet Ministers were paraded like sheep to defend these indiscretions, as though South Africans and the world is blind to these overt discretions on the part of the highest citizen of South Africa, who is charged Constitutionally to uphold the integrity of the country. These Ministers and governing party mandarins reinforced the message that the president has never done wrong in his life. He never took money from his cronies and other shady characters. He did not mean to sleep with the daughters of his comrades and close friends. They seduced him. This is what South Africa has become under the ANC led government, post 1994. In reality the revolutionary credentials of this once great party has been reduced to ashes by the current leadership, and to this end a few comrades have spoken out against this greed and sleaze. Men such as Ronnie Kasrils, the former Minister of Defense and a revolutionary, Trevor Manuel, the former Minister of Finance and a host of others. They have been criticized by the ANC for speaking out. This is the type of democracy that South Africans have not voted for. “South Africa is living in an age of henchmen and the president is being defended by amoebic lackeys and this has come with extreme patronage for favours given to the president, even by some who had fallen out of his inner circle, like disgraced newly appointed Deputy Minister of Agriculture Bheki Cele, who was fired by President Zuma as the National Commissioner of Police and Stone Sizani who was an ideologue of former President Mbeki. He has undergone a Damascene conversion and now thinks that President Zuma is the best thing that happened for South Africa. There are scores of others who thrive on nepotism and patronage within the ANC.

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According to Makhanya (2014: 2) “these henchmen are a mixture of ambitious party enthusiasts and old – order relics. Among them are the Young Communist League leader Buti Manamela, a bright and energetic Member of Parliament with ambitions of high office. The relics include Cedric Frolick and Luwellyn Landers, who served in apartheid‟s Tricameral Parliament and would have been considered sellouts by most members, has now been rewarded with a Deputy Ministers position.” Cry the beloved country under the current ANC. These conversions to the ANC‟s gospel and desperation to have their past forgotten has earned them powerful roles as Luthuli House (ANC Headquarters in Johannesburg) bouncers whom unquestioningly carry out instructions in Parliament. “The culture of henchmen has been one of the hallmarks of the Zuma years and will continue as such for the next five years. During his time in office, President Mbeki was accused of surrounding himself with „yes men‟ who did not challenge his thinking. The nation suffered greatly for that. But as dishonorable as that was, at least that was about ideas. In the Zuma age, the role of yes men as henchmen has been taken to another level and this is simply to defend the president‟s wrongdoing” (Makhanya, 2014: 2). This is precisely what South African politics has been reduced to.

THE CRACKS WIDEN

Around the world there are markers of discontent as global financial crisis and the subsequent recession have exposed vulnerabilities and structural imbalances. South Africa is now really in recession. The economy in the last quarter grew at 0.2 percent. In reality this is a zero growth rate and the target of a 2.8 percent growth rate of the economy in 2014 is far off and that this target for all intents and purposes will not materialize. Unemployment will further rise, inequality will increase and greater poverty will escalate. In reality income inequality has widened and this scenario paints a picture of gloom for the country. The rand has further depreciated to R10.70 on global markets and to buy it will cost over R11 to a dollar. The increasing strikes and the unsettled platinum mining sector which is on strike for five months does not help the situation with food and petrol prices rising and inflation will soon be completely out of control. All of this has led to the reality of social mobilization which has repressed dialogue and political participation for a generation. The pursuit of austerity in South Africa has not worked because there is no political will to do so by the government as the rich getter richer in a most unequal society. The continued exorbitant bonuses and salaries being paid to CEO‟s and bankers are unacceptable and vulgar in essentially a “Third World” country. When the global financial crisis hit, South Africa had her own legacy of inadequate infrastructure, widespread poverty and inequality, structural unemployment and a slow pace of transformation. Entrenched in a long history of unbalanced development, these challenges require a clear change of direction and a new momentum, in order to restore the imbalances and secure the goals of a developmental state.

Faster economic growth must go hand in hand with job creation and thus generate the tax revenue that will enable the government to pursue progressive developmental policies. As a country we need to engage upon the devastating effects of inequality. The ideal solution to excessive executive remuneration should come from the actions of a critical mass of ethical and accountable South African executives who must demonstrate leadership, responsibility and fairness. Companies play a critical role in society because they provide goods and services, income to employees and investors. Pravin Gordhan (2014: 3) former Finance Minister, points out that “Business leaders are responsible for avoiding as far as possible, and for mitigating, the negative social, economic and environmental impacts that their decisions and policies may have. This means taking responsibility for the impact of that their remuneration policies may have on South Africa‟s income inequality problem, and that they are committed to the struggle against inequality. As matters stand today in South Africa business leaders appear more often to be part of the problem rather than the solution.”

There needs to be a new business culture in order to serve South Africa and to deal with the challenges that confront the country. They need to show empathy and must enhance the lives of the poor and contribute to the transformation of the economy and of society. They must in the transformation agenda create opportunities and the transfer of skills to those that remain on the fringes of the economy. South Africa has grown to be one of the most unequal societies

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access in the world with very high levels of poverty. Unemployment amongst the youth has increased to very large numbers and this is a dangerous scenario. Table 1 below shows the wage gap between worker and chief executive officer.

Table 1: Preliminary 2012 worker / CEO wage gap

Preliminary 2012 worker/CEO wage gap Business Services 136

Eskom Holdings Limited 166 Technology and Hospitality 170 Telecoms has the highest gap Construction 184 between worker and CEO in the Healthcare 221 country

Diversified Holdings 263

Cross Sector average 283

Mining 302

Paper and Packaging 308

Retail 344

Food and Beverage 385 Technology and Telecomms 393

Source: LRS, Bargaining Monitor, Vol. 27 (179), March 2013, p 15

PUBLIC SECTOR WAGE BILL NEEDS TO BE CONTROLLED

The public sector wage bill under the current ANC government has escalated and would spiral out of control. Sooner or later it would not allow for control if the tide is not stemmed now. “The size of the public sector wage bill will have to be cut if government wants to maintain its level of expenditure on service delivery and improve its quality in the context of slower economic growth” Ensor, 2014: 2). This warning derives from the advisory body of the Fiscal and Financial Commission. This is due to the reality that the government has onerous levels of debt, cannot implement austerity measures and therefore the demands for social services cannot be met and will not be met. According to Tania Ajam (In Ensor, 2014: 2) “that too much money was spent on administrative staff rather than service delivery staff and therefore the delivery of items such as textbooks and medicines suffer.” The International Monetary Fund (IMF) agrees with this view and noted (in Ensor, 2014) “that last year‟s country report on South Africa showed that the bloated public service wage bill was responsible for the deterioration in the budget deficit since 2007 / 2008. It reduces expenditure flexibility and crowds out government capital spending.”

This year the government‟s wage bill for the nearly one million civil servants will amount to R439 billion, or about 39 percent of total noninterest government expenditure. This is way higher than last year‟s average of 22 percent for other emerging markets. The report stressed that the government would have to do things differently if it wanted to maintain service delivery at existing levels without raising taxes. Public spending would have to be made more efficient through greater coordination across the government and by stamping out corruption. There is an enormous amount of waste and under spending in the system. The government needed to use available resources more efficiently. There is a crisis of quality” (Ensor, 2014: 2).

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access

There is no doubt that post 1994, the democratic government in 20 years has provided more health, education and social services but the quality has not improved. Reforming the way public services were delivered would lower costs as well as improve quality. The government should not resort to simply cutting costs to reduce public debt but rather reform programmes and service delivery. In other words, due cognisance of the all embracing reality that simple cost cutting does not encourage longer – run fiscal stability or allow for reforms that will generate more value for money spent. The idea by government to set rigid public debt targets or the imposition of across the board cuts or expenditure ceilings in order to control debt must be avoided, because this will hurt good programmes as much as it did poorly managed ones. On the other hand the social grants bill is escalating beyond control and the government is unable to curb this spending because, it cannot promote sustainable employment and thus social grants are an immense burden on the state and as things stand, they will not be in a position to sustain social grants for a much longer period. This is a time bomb waiting to explode and therefore proper and realistic intervention strategies are now required. The position is therefore bleak and precarious in South Africa.

FURTHER SCRUTINY OF SOUTH AFRICA’S WAGE BILL

The issue is simple to comprehend. Hoe should the government be spending the tax payer‟s money in South Africa, with particular reference to a bloated public service? The Financial and Fiscal Commission has been silent in recent years about government spending but has now spoken out. The Business Day (2014: 8) points out that “the government has for the past couple of years committed to capping its spending growth at about 2 percent in real terms, and there has been a broad commitment to cap the number of public servants and rein in the growth in the public sector wage bill, which makes up nearly 40 percent of government spending.” Any cutting of the wage bill will not go down well with the newly appointed Ministers and the bloated cabinet of Ministers and Deputy Ministers appointed post the May 7 elections. They will all have hiring aspirations of their own and knowing the South African culture of Ministers. Hiring will increase and costs will explode as more and more people will in all possibilities be hired. All of this would put economic spending and growth at risk on the basis that growth is faltering, putting government projections and thus South Africa‟s sovereign credit ratings at risk. In February, the former Finance Minister penciled in a 4 percent budget deficit for the 2014 /2015 fiscal year, based on a projected economic growth of 2.7 percent this year. This is already looking way too optimistic even before the latest gross domestic figures. The economy has contracted and we in South Africa would be lucky to realize a 2 percent growth this year.

All of this implies categorically that the government will collect significantly less revenue that it had hoped, and there is no doubt that the deficit will be higher, which in turn means that the government‟s debt level, which is nearly the 40 percent level , will be climbing higher and higher for the foreseeable future. This is a precarious situation for South Africans who are becoming poorer and poorer because of government policies and its inability to control the mining strikes, service delivery protests but most importantly, its failure to increase employment and the fact that unemployment sits at between 30 to 42 percent. Inherent in respect of state spending is the fast – growing state sector at all three levels of government, crowding out expenditure on other, service delivery items. The risk is once again real with the rand sliding to nearly R11 on the exchange markets, faces the possibility of sovereign rating downgrade, driving up the cost of government debt still further. A deep and thorough look is require at the Central and Provincial levels of government in terms of cutting the high salaries, retrenching „dead wood,‟ curbing appointments, instilling a culture of value for money, ensuring quality public services in every area, from education and healthcare to policing and welfare, in a cost effective and sustainable manner. To this equation must be added the 250 000 additional municipal staff which are excluded from the 1.2 million public servants at provincial and national level. The people have been promised many times that the ANC will deliver a more capable state to do better by its people. It now needs to action its promises or sinks the country into a deep hole of morass, inequality, and further poverty.

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ECONOMIC CRISIS FORCED STATE TO BECOME BIGGEST EMPLOYER

The City Press (2014: 7) reports that “it‟s a common misconception that state employment rocketed after 12994. However, in 2012 the government broadly defined employed 1.93 million people and racked up a wage bill of almost R420 billion. Apart from expanding the public service has also become more and more reliant on part time employees. It has not done much about the controversial issue of labour brokers, which is viewed by the trade unions as government reneging on agreements that agreed to getting rid of labour brokers. Since 1998 when Statistics South Africa started distinguishing between full – time and part time – workers, the part timers tripled from 87 000 606 (5.6 percent) to 258 946 (13. 4 percent) of the total civil service staff compliment.” This is a vexing issue and bodes ill for the government. It also implies that the government is in cahoots with the capitalist classes at the expense of workers.

THE CIVIL SERVICE REALITIES MUST NOT BE USED AS AN EXCUSE

After 1994, change swept South Africa, and this change swept and extended to the country‟s civil service, where white and black people had to learn to work together, often for the very first time. However, given the morass that has set in among civil servants and South African politicians, this cannot be used as an excuse for government failures after 20 years of democracy. According to Van Rensburg (2014: &), “In 1996, after the merger of the Bantustans of South Africa, there was a huge expansion of the civil service and many accepted voluntary severance packages and many were whites who had the marketable skills. This permeated the senior civil service. Post the 1994 democracy people had no confidence in the black democracy under the ANC because they felt that they will be fired or will get redeployed. However, new opportunities were provided and in the old civil service under apartheid, everything was prescribed.”

Back then there were no unions and when bargaining began in after 1997, the major conflict was the difference in pay between officials of the old white South African order and those of the black Bantustans. Afrikaans was the main language of the public service. Before 1994 the hierarch was very strong. In 1994, under democracy there were still different facilities for white and black civil servants. White counterparts often told blacks in the civil service that they were tokens and useless and training credentials and academic qualifications obtained by blacks were not recognized by the all white statutory councils. There was stark separation in the public service of South Africa. Apartheid was brutal and people were programmed by apartheid like robots. We have very good policies but the problem lies with implementation, corruption and patronage. There is a general lack of commitment by black public servants post 1994 and they are not focused. Indeed, much can be placed at the feet of apartheid, but after 20 years of democracy, this has now become a lame excuse in respect of efficiency, responsibility and accountability, in terms of steering the country into a path of development, in order to promote the general welfare of the population. There is a lack of dedication and accompanying patriotism. It is these issues that hold South Africa behind from redressing the imbalances of the past.

WRONG SKILLS AND YOUTH JOB CRISIS FOR WOMEN

Carol Paton (2014: 1) reports that “young women in South Africa are less likely than young men to get a job and both are less likely than their parents to find work despite being better educated, data released by Statistics South Africa on the 5 June, 2014. The finds draw from the Labour Force Survey of South Africa 2014” (In Paton, 2014). The report paints a picture of rising youth unemployment which will remain entrenched well into the future due to poor educational outcomes. Education remains the best route to employment. The report further states (2014) that “the unemployment rate for youth, those aged between 15 and 34 rose to 36.1 percent this year (other sources puts this figure at 42 percent) from 32, 7 percent six years earlier. The situation has worsened and this state of affairs will not get better in the years that lay ahead. This does not include students and youth undergoing training. This is a

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access scenario in other countries like Spain and Portugal also. The South African economy is also mired in long – term, structural unemployment.

Youth unemployment is more than double the rate of adult employment says government. This is not a correct picture portrayed by government because the general unemployment by adults exceeds or falls between 42 to 45 percent in South Africa, according to various sources. Unemployment is worse among black Africans, at 39. 4 percent and least severe among whites, where 9. 6 percent of youth are unemployed. The figures provided may be skewed because the numbers within these populations are different in terms of representivity as a breakdown of population in South Africa. South African whites are a small population. Young women are particularly vulnerable, with a greater proportion of women unemployed than men across all nine provinces of the country. Thirty nine percent of women are out of work. The failure to tackle youth unemployment in the past 10 years is a reflection on failed policies in education says the report. The skills mix is poor and there are no opportunities for the youth to gain experience. It is obvious that South Africa is sitting on a time bomb exacerbated by poor government policies to generate employment for the youth and the entire population. Government has to intervene or pay the consequences for its failed policies and lack of political will to intervene decisively.

TAX HIKES

The imposition of higher taxes is now inevitable. This is not solely due to the world economic recession but because of the poor management of South Africa‟s economy, wastage, unfruitful expenditure, government attitude and a host of factors identified in this paper. The Treasury has hinted continuously at this possibility, post the May 7, 2014 elections. These statements build on the continuing warnings by the former Finance Minister “that in the absence of strong economic growth, the government would have to seek alternative ways of raising finance, including raising taxes” (Ensor, 2014: 2). This is due to the contraction of the economy in the first quarter. This will all lead to lower, tax revenue, greater burden on the people, increased inflation and so on. Higher inflation and the possibilities of interest rates being increased by the Reserve Bank will mean lower tax revenue to fund soaring state debt and expenditure programmes. The tax policy frameworks have to be reassessed and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability. It is obvious that due to the mismanagement of the economy by the government, its propensity of over spending would require significant adjustments in revenue and reductions of a drastic nature in other areas of spending. Given the pace of globalization, the poor economic growth and the more than significant social challenges such as persistent unemployment in all sectors and particularly the youth, poverty and inequality, there is no doubt that there is an urgent need to review what role the tax system can play as part of a coherent and effective fiscal policy framework in addressing these challenges.

It has to be realized that South Africans are already highly taxed at 40 percent on average and there are a number of taxes such as value added tax (VAT), the petrol levy, estate taxes and others that further compromise the taxpayer and workers. High commodity prices, rising costs, falling outputs and declining margins amidst other issues must be seriously looked into by government. The country through the Reserve Bank will have no alternative but to raise taxes and this will further compromise the majority of poor people in the country. It seems that the government has no action plan to deal with employment creation and ideas to stimulate the compromised economy of South Africa.

PLAN OF ACTION

It is obvious that South Africa with the results declared in the May 7 2014 elections has got the politics right but, it is now time to get the economic right. The economy must take center stage not only because of the weak economic outlook, but because of the structural problems that need to be urgently fixed. The government now has a renewed mandate to tackle the problems and challenges that confront the country. This has to be done with the private sector

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access that has hitherto not come to the party in respect of its duty towards social development. The idea will be to action the National Development Plan (NDP) which had about 90 percent support from the electorate. Procrastination must become a thing of the past and according to Parson‟s (2014: 2) “this must be done to boost investor confidence as the certainty and predictability of policy direction and there has to be policy coherence which is lacking and absent. We cannot go back to uncertainty.” In achieving the trajectory for development, the trust deficit between business and the government must be reevaluated and rectified and creative ways must be found to restore that trust. The idea must be to achieve and generate an economy that will be bigger, stronger and better, in spite of the structural deficiencies being experienced. It is a question of not more government but improved and sustainable governance in both the private and public sectors of South Africa.

THE IDEA IS NOT TO WASTE A GOOD CRISIS

Steven Friedman states that “Occasionally we land in a crisis that jolts key actors into realizing that they need to change some of what they do. If the public debate is a guide, South Africa is wasting a crisis and the time has come on the basis that the South African economy shrank by 0. 6 percent in the first quarter and that this will not change in the second quarter. We are moving into a recession because of the protracted platinum strike that has wreaked havoc over the last five months and there is no sight in end, with the economy losing R29 billion over this period. The phrase don‟t waste a good crisis is commonly used. But what does it mean. A crisis is a turning point, an event that convinces people what they have been doing is not working and they need to change course. To waste a crisis is to get a message that we need to change but carry on the same.” South Africa, with its corrupt politicians in the main and its inept bureaucracy have been given a fresh mandate by the electorate through the May 7, 2014 elections to regroup and begin to turn things around for the benefit of the people and the country as a whole. Crises are vital in that we usually need them to move us forward. Our divisions run deep and so the powerful actors tend to blame the others for problems rather than looking at the morass from their own role. But occasionally we land in a crisis that jolts us all. The question is, is our worst economic showing in six years one of those crises, particularly as it seems to stem from the failure of business and labour to end the platinum strike? Not so, if we look at the attitudes of business and labour. Government seems to avoid this question and posits that all is well. Can it change track is a decisive question. The unions on the other hand are faced with their own internal difficulties. There is very little of the fresh strategic thinking needed to get unions out of what looks like a cul – de – sac.

We need to speak openly about the economic plight that confronts the country, the inevitable recession that would soon set in, the inflation that will balloon beyond control, the accompanying unemployment that is escalating, the increasing levels of inequality, the unprecedented poverty that faces our people, the rampant corruption that has taken hold within all sectors, political patronage and nepotism are issues that we seem to shy away from. Has business no role to play in fixing these problems? Has business contributed nothing to the hostile relationship between it and the government? On the other hand we see that “across the globe, a tide of nationalism and overt ethnicity with racial polarization is challenging minorities and indeed free markets and this could trigger the rise of right – wing authoritarianism like that which destroyed so much in the 1930‟s. Therefore businesses should be freed from the regulation that governed market economi8es for much of the past century” (Friedman, 2014: 9). This challenges one of the great myths of economic debate in South Africa, because we all need our politicians to behave the same way as that everywhere else. Politicians here who are suspicious of business are part of the global trend.

Those who dammed business friendly people in the government are also self – defeating. They clearly believe that a constructive relationship between business and the government is needed. But their attitude makes that constructive relationship impossible. Businesses need to build a relationship with government, irrespective. There will be no solution to our problems without some changes to the way business is done in South Africa, and without a more constructive relationship between business and the government. If this is not recognized then, there is no turning point, no crisis and no prospect of getting out of the morass and mess that South Africa is currently in.

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access

SACRIFICING OUR LIBERTY

South Africa fought against apartheid in order to liberate it from the dastardly crimes of apartheid. Post 1994 heralded freedom and hope to create a new South Africa, but in 20 years of so – called democracy the government that has won successive elections has compromised democracy and in many ways put paid to the legitimate aspirations of the masses of our people. This is exemplified in the all embracing reality of poor governance and indeed the suppression of basic rights in many spheres of public life. State regulation according to Leon Louw (2014: 9) points out that “of our personal affairs is a terrifying juggernaut. Among other things, it is penalizing us for protecting our health, forcing us to buy insurance for strangers and subjecting us to the biggest and most costly bureaucratic empire in Africa. It is minimizing our choices and maximizing inefficiency. Basic principles of economics and the rule of law, especially the separation of powers, are being compromised to the vanishing point.” Most people think that financial markets and health regulation as complex, sophisticated and remote. Few realize how simple it really is, and how directly and disastrously regulatory diarrhea affects us.

Louw (2014) further points out that “the latest travesty is the second draft demarcation regulations, under the Short Term Insurance Act. Insuring ourselves against some health risks in the form of hospital cash plans, for example, has been and will increasingly be banned. To the extent allowed, if officialdom has its way, it will be more curtailed than ever. The South African public health services is in shambles post 1994, there are a shortage of hospital personnel, drugs and medicines, a lack of equipment, blatant inefficiencies and the proposed National Health Insurance Scheme (NHI) has not yet materialized, so much talk but no tangible results and the costs of implementation are too exorbitant. We will be free, for instance, to pay cash for healthcare, but not to decide how, if at all, to insure against these very same costs. When we do buy whatever private medical insurance is still allowed, the people, not the government, are now required to subsidize high – risk strangers through community rated premiums. Bureaucrats want to sacrifice the liberty of South Africans with the sanction of government, on the altar of social solidarity.

Louw (2014) further states that “the latest tsunami of control headed our way epitomizes the degree to which the legislative branch of government, and thus the rule of law within South Africa‟s constitutional democracy, have become all but redundant. Parliament is increasingly duped by the executive to abandon its legislative function. The official explanatory memorandum to the draft regulations shamelessly proclaims the legislative authority of the executive, with which it intends eroding more of South African liberty.” The assault on liberty is disguised by the usual tyranny, called discrimination, if the sick are not subsidized. This is the type of democracy that South Africa has been reduced to with government reneging upon the basic freedoms of the people and negating its constitutional responsibilities that, it is charged to carry out. We may not, for instance, pay lower premiums justified by our healthy lifestyles. We must subsidize strangers, even those with self – inflicted problems. Proposing health cover solidarity is like promoting supermarket solidarity. Everyone pays the same regardless of what they buy. Why do we acquiesce like lambs to the slaughter? Why their deafening silence when their freedom to compete and innovate for us is under attack?

Petty bureaucrats have amassed so much power goaded by politicians that victims are too terrified to openly proposed regulations that will drive new nails into the coffin of our rights under the consumer protection label. The central thrust of this demarcation though, is to separate our private medical insurance arrangements from medical aid schemes and to dramatically curtail the former. These are not unintended as regulators will have us believe. When healthy people turn to private insurance for rational reasons, Louw (2014) says that “draconian one – size – fits all control is proposed, including prohibition of certain kinds of cover and price control, the sole effect of which is to reduce the choice of what we may buy, to reduce the number of people available to advise us, to drive up the associated costs.” Instead of failed policies being scrapped, they are being made worst until the devastation is complete. This is the situation in South Africa in the first 20 years of democracy and is a feature under the ANC led

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access government. In fact this is the state of play and the onslaught is led by government and its bureaucracy to increasingly shape society by intervening in sectors through, one sided regulatory frameworks in many walks of life and thus disregarding South Africans in developing the framework of acceptable and sustainable democracy. It is authoritarian public administration and governance which can only compromise the gains of our hard fought democracy. This has to be checked by civil society through challenging government and standing up to its misguided policies.

THE FUTURE STILL OF BLACK MARGINALIZATION

As we talk of radical transformation of South Africa‟s economy and many service centres, there are fundamental weaknesses, which must be addressed by the government and the private sector. The biggest weakness is the failure of the government and the private sector in respect of capital accumulation by the historically marginalized black population to participate in the economy gainfully. In this regard we do not include a very small number of Black entrepreneurs that have been empowered by misguided policies of the government and the private sector, which has empowered the predatory black elite. The Black Economic Empowerment policies have generally not served the majority of South Africa‟s population. This is accompanied by deep seated and fundamental structural exclusion and, consequently and most importantly, building intergenerational equity. In this regard Mahabane (2014: 9) states that “Although South Africa has had the benefit of significant6 revenue mobilization for a developing economy, and has attempted fiscal redistribution to bridge inequality and promote economic development, it appears to be wasteful in the reallocation of resources and, has paid insufficient attention to resource leakage and its effect on building a more inclusive and equal society. Importantly, not only is South Africa‟s record on bridging the inequality divide patchy, it has failed in capital and asset formation to promote intergenerational equity. While a key failure has been at the political and policy leadership level, elites within the government and the particularly within the private sector have equally failed society.”

It must be noted and fully appreciated that 20 years after the advent of democracy in 1994, which gave birth to aspirations of sociopolitical freedom and material prosperity, and promised an end to class – delineated exclusion and inequality, most South Africans and particularly the black population remain structurally excluded from opportunity and genuine freedom of choice. Most Black children born in South Africa will have a severe disadvantage to White children and the children of Black elites. They go to underperforming schools and, half of them will not complete their high school. Given South Africa‟s past, we could have expected more effective and sustainable progress 20n years into democracy. The future seems to hold no prospect for improvement, and is one of Black marginalization.

The corporate sector has failed to embrace the spirit of transformation, paying lip service to enterprise development, affirmative procurement and investment in skills. Corporate South Africa has lamented the poor education and yet the value of spending on training as a percentage of the wage bill is significantly less than that “of India, South Korea and a host of other emerging – market peers. In reality BEE has failed the Black population of South Africa and to this end the government, the private sector and, the predator Black elite have failed South African‟s dismally. It questions the very legitimacy of empowerment, despite our history of systemic and institutional disempowerment, and a legacy of structural incapacity. Unfortunately, the government‟s approach to BEE shows its focus on real development and transformation is deficient.

According to Mahabane (2014: 9) “The failure of South Africa‟s political and business elites to bridge the enormous historical, racial and ideological gulf means that South Africa now faces a revolt from the marginalized members of society. It is at the crossroads, albeit a potentially amorphous one. Another aspect is youth driven social revolts and nascent worker revolts now unfolding with fury. It is because of the failure of politicians being accountable; citizens

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access are acting as a voiceless people, resorting to civil disobedience and violent clashes with authorities. It is a rebellion of the poor.

DO AWAY WITH ALL THE IDEOLOGY

The platinum strike that has gone on for 5 months now, seems not to dissipate and the most frightening scenario is that the government now blames foreign whites and the new party the Economic Freedom Fighters (EFF) for fuelling the crisis. There is not one iota of truth in this because government wants to blame others because of its failure, intransigence and inept handling of this crisis. This is exemplified further by the reality that the new Minister of Mineral Resources appointed recently started negotiations and gave both the AMCU union and Lonmin until yesterday to solve the problem. None of the players could reach consensus and thus the Minister has walked out of the negotiations. This is the bullying tactics of a corrupt and inept government that constantly shifts the goal posts to suit itself. It is just not worker friendly and cannot negotiate in good faith. Politically and ideologically motivated intransigence of this nature is, of course, the last thing South Africa needs another huge strike “which is on the cards involving the industrial sector would almost most certainly push South Africa into total recession, the economy having contracted 0. 6 percent in the first quarter, due to the platinum strike. The government has a potential crisis on its hands” (Editorial, Business Day, 2014: 8) and, therefore, needs to act swiftly to remedy the declining perceptions and realities of development.

AFFIRMATIVE ACTION

The policy of Affirmative Action (AA) was a necessary tool that was invoked by the democratic government in 1994, after the historic elections that ushered in democracy and equal opportunity for all citizens and particularly the majority Black population of the country, given the legacy of apartheid. Twenty years down the liner of the new found democracy, it can be confidently asserted that the AA policy has failed the citizens of South Africa, but more importantly, it has failed South Africa. What South Africa needs is AA and economic empowerment policies that work in creating opportunities for disadvantaged people and thus building the economy that is reeling due to great policy errors that were not taken into consideration by the African National Congress government, post 1994. Such policies have worked against the country and continue to do so even today and stymies development and the very opportunities that the government wanted to provide for its Black citizens in particular, for women and minorities. If race based measures were achieving that result, South Africa would have been seeing the evidence of it by now and 20 years after democratic government. What we see instead is that a small Black elite has been created that appears, at times, to use, even unwittingly, its capacity to control access to the benefits of the policy to perpetuate its own advantage.

It is for the above reason that, 20n years into South African democracy, fewer than 10 percent of Black African people and / or households have private medical insurance or pay bonds on houses, two of the best benchmarks of middle – class status” (Cronje, 2014: 8). At the same time, the race – based nature of affirmative action policy has become a veil behind which to conceal corruption and incompetence. Because many people are appointed to positions on the basis of their race, there is little public criticism of those appointments even when the people in question are manifestly unfit. Take the deaths for example, in Bloemhof in the North West Province In June, 2014 of three children after they drank contaminated tap water, the result of Bloemhof losing its capacity to maintain the sewer plant. Yet in all the commentary and reporting on these deaths, not one media outlet has mentioned affirmative action. As is often the case, the truth lies in what no one is prepared to say. Affirmative action cannot be mentioned because to do so is to cross the barrier of political correctness forced on South Africa by the ideology of race – based empowerment 20 years after democracy. Only once people break down that barrier does it become possible to talk about alternatives. Such alternatives should ensure, first, that poor people get access to the benefits of affirmative action and empowerment policy. Second, that the policy does not harm the most vulnerable

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access communities by shielding incompetence from scrutiny. The time has come for the South African government to look at this issue very seriously and to remedy the persistent anomalies that hold the country from moving forward and to understand that this policy is having a negative impact on social issues and the economy of South Africa.

CONTEMPT OF THE LAW

On the other hand, we find increasingly under the government of South Africa contempt of the law. This contempt goes across the board and in all spheres with no reference to the voter. Andrew Cadman reports (2014: 8) that “only last week (June, 2014) the Johannesburg City Council‟s proceedings last week in relation to approval of the city‟s R46 billion budget have received little comment in the media. This is surprising given that the speaker of the council ruled that the budget should be voted on without first allowing the council to debate it. In protest the Democratic Alliance walked out of the chamber in protest.” This act by the speaker exemplifies the African National Congress contempt of the law. It creates a dangerous precedent for all legislative chambers in South Africa and should not pass unchallenged. This is currently and increasingly the state of play within the body politic of the country and the situation of unfair play and the exhibition of authoritarianism is becoming increasingly the order of the day, under the ruling government. Imagine if the speaker of the National Assembly adopted a similar attitude in relation to the national budget and other contentious legislation?

The Constitution of the Republic of South Africa according to Cadman (2014: 8) states that “all spheres of government must provide effective transparent, accountable and coherent government for the public as a whole and the objects of local government are to provide democratic and accountable government of local communities. These constitutional principles find further expression in the Municipal Structures Act, the Local Government: Municipal Systems Act and the Local Government: Municipal Finance Management Act.” What could be less democratic or accountable than to deprive a legislative chamber comprising representatives of the community it serves, the opportunity to debate critically important matters such as the budget, before putting them to the vote? This is the politics that South Africa has been reduced to in all three spheres of government at the local, provincial and national levels of government. These are the types of the illusions of power that are perpetuated with impunity upon the people of South Africa by the ruling party of the country.

CONCLUSION

Under the current ANC government and in spite of the fact that it led the revolution against apartheid, it has under democracy made strides but has failed the masses in terms of service delivery and constitutional imperatives. Corruption has increased; the rich have gotten richer whilst the poor have got poorer. Strikes and service delivery protests have escalated. The economy is in shambles. Growth is overtly depressed. Basic services have been compromised and health and education are in a state of decay. The country is sliding into a phase of no point of return. The saving grace is the all embracing reality that, in spite of all of this the people of South Africa and particularly the poor masses have through the May 7, 2014 elections, given the ANC another chance to deliver and run government on their behalf. The ANC dare not fail the people. If it does there will be dire consequences for the ANC in the 2016 local elections and definitely in the next general elections. There is something rotten in the state of South Africa. This situation is glaring and government must take a quantum leap to change the state of play, surrender its conservatism, or in the long run face the consequences that could befall it.

Karodia (2013: 28) states that “All of these policy disjunctures and the inability of the African National Congress to run accountable government have led to poor governance and a lack of direct foreign investment, the massive fluctuation in the value of the rand as currency on the world market, increased borrowing, escalating debt and to massive poverty, inequality that is widening and increasing employment. All of this has led to a poor perception of South Africa on global markets.” Given these scenarios, it is imperative that, the situation be saved by invoking a

Canadian Open Management Journal Vol. 1, No. 1, June 2014, pp. 1- 17 Available online at http://crpub.com/Journals.php Open Access well thought out game plan, as a blueprint for transformation of the both the public and private sectors. Failure to consolidate an acceptable plan far beyond the accepted and controversial National Development Plan (NDP) will have disastrous consequences for South Africa‟s young democracy. There is no doubt that it is a question of sound leadership that is required to address the manifest problems that confront the South African nation as a whole.

All of this because of poor political leadership and an inept bureaucracy has led to serious policy errors post 1994. Leaders must be in a position to distinguish between management and leadership and must invoke all facets of constitutional democracy that have been enshrined in the Bill of Rights and thus give meaning to the rule of law. All of this has led to poor governance and the use of brute force by the government, which has eroded the cardinal principles of the Constitution of the Republic of South Africa.

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