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Policy Stalemate

So far President Jacob Zuma has appeared business-friendly, but can he sustain this position in the face of increasing pressure from the left?

Kevin Bloom

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Frayed rope

The collision of political expectations and economic realities spotlights the discrepancies between what business can offer – against the backdrop of a global recession – and what unions want. Are the recent strike actions, taken with the Youth League’s call for nationalisation of the mines, an indication that economic policy may change? What do international analysts make of it all?

For a few hours during the afternoon of 20 December 2007, on a sports field at the bottom end of the University of Limpopo campus, I stood waiting in the mud with an American journalist named Doug Foster, a man who had once edited the esteemed journal of opinion, Mother Jones. Foster, now a professor at a top US journalism school, was back in South Africa to gather material for his book (still in progress) about post-apartheid politics. I had met him during a previous visit, and we had struck up a friendship, so I was in little doubt as to why I wanted to be in his company at that particular moment in history: when it came to Jacob Zuma, the man about to give his inaugural address as newly elected president of the ANC, nobody else I knew had Foster’s level of access or insight.

“I’ve seen the speech,” Foster whispered, as we watched Terror Lekota, the recently deposed ANC national chair, hustle into a makeshift meeting room for a last-minute audience with Zuma. “They’re still fighting over the lines.”

Fight or not, when the lines were finally delivered over an hour later, they were exactly as Foster predicted they’d be – gracious, conciliatory, and mindful of the gaze of the world’s media. Zuma called Thabo Mbeki, the state president who had tried to destroy him, a “comrade, friend and brother”. He confessed that he never thought the two of them would compete. He even referred to Mbeki as “my leader”. Then, clearing his throat, Zuma looked down at the TV cameras. “There is no reason for the domestic or international business sector or any other sector to be uneasy,” he said. “We have made it clear that we need more local and foreign investment.”

The ANC’s fateful conference at Polokwane was already 18 months in the past the next time I came across the name Doug Foster. Zuma had been state president for almost a month, Trevor Manuel was in charge of national planning, and committed leftists Rob Davies and Ebrahim Patel had been awarded the key cabinet portfolios of trade and industry and economic development, respectively. On the front page of the June 2009 issue of The Atlantic magazine, a Washington-based monthly read by many of the US’s most powerful politicians, was the barker: “South Africa’s Unnerving New Leader”. The byline above the lengthy piece inside the magazine was Foster’s.

Here’s what my friend wrote near the top of his article, just after describing an intimate visit with Zuma at the Nkandla homestead: “South Africa appears to be at a pivotal moment. The agreement that ended apartheid 15 years ago gave blacks the right to vote in exchange for a commitment not to alter the basic structure of the country’s economy – no massive redistribution of land or wealth, no nationalising of the mines. But this trade-off set the stage for a bedevilling challenge that the government hasn’t yet resolved: how to reconcile incongruent, coexisting worlds – one white and rich, the other black and poor.” The point, of course, was that the factions of the left who had voted Jacob Zuma into power – the unions, the ANC Youth League, the South African Communist Party – would now expect him to rise to this challenge in a very specific way. Zuma, a humble goatherd from the hills of KwaZulu-Natal, a landscape just described by Foster in striking detail, had become the symbol of hope for South Africa’s “Everyman”, a unifying statesman who could finally make good on the party’s 1994 promise of a “better life for all”.

Near the end of the piece, Foster outlined for his elite American readership the extent of the paradox Zuma was up against. He wrote about Zuma’s visit to the United States in October 2008, a trip aimed at convincing the world’s political and financial masters that a perceived leftward leap by the ANC was in fact no reason to cut back on foreign investment. “We are not going to change policy,” Zuma assured investment bankers, multinational CEOs, and editors at the Wall Street Journal. But weeks before South Africa’s April 2009 election, when Foster reminded Zuma of this statement, policy direction suddenly seemed less clear.

“[Zuma] began a disquisition about the difference between necessary adjustments and the changes that might upset foreigners,” Foster wrote. “He turned to fix me with a stare, as if he was suddenly uneasy about the line he was walking. I asked, ‘Is that change you’re proposing a matter of degree, or a matter of kind?‘ He shifted in his seat, pausing. ‘Could be both,’ he said.”

In early July 2009, as this article is about to go to print, there is alarm in certain quarters of the South African media that policy change may indeed become a matter of kind. On 1 July, for instance, ANC Youth League leader Julius Malema floated the idea that the mines be nationalised, in accordance with the principles of the party’s 1955 Freedom Charter. At first ANC spokesperson Jessie Duarte appeared to reject the call, insisting that economic policy would not be altered. But a few days later she released a memo on the matter, stating, “It is a debate we welcome.”

If this turns out to be a typical ANC ruse – the party employing its radical elements to test the mood of the country on an explosive issue – it still needs to be seen in the context of what else is presently happening. On 6 July, editor of The Times Ray Hartley put the situation thus: “A titanic battle for the soul of South Africa is playing itself out before our eyes, but we just don’t seem to see it. Around 70 000 construction workers are set to strike this week, bringing construction on 2010 stadiums and related projects such as Gautrain, to a grinding halt. How long they will strike for is uncertain, but the fact remains that this will damage South Africa’s image on the eve of its biggest ever international marketing opportunity, the 2010 World Cup. Even as this occurs, education unions are considering their options ahead of a strike decision later this month. What is clear is that the union movement has dismissed the pleas of President Jacob Zuma and is going for the jugular.”

Strong words by any measure. The question, though, is how the international community views such developments. What will all this do to Zuma’s efforts to assuage the business sector and attract much-needed foreign direct investment?

Mike Davies, an analyst at the London offices of Eurasia Group, one of the world’s leading political risk research and consulting firms, is – if anything – philosophical. “Having moved from an election cycle to a governance cycle, of course there will be a shift by Zuma in his strategy,” he tells me via phone. “His constituency is now much larger; it includes local and offshore investors as well as the left. Remember, important political statements were made at the World Economic Forum. Zuma and Manuel were critical of the unions. It’s setting up a contest, and the unions will try to maximise their own agenda.”

But, Davies adds, the latest showdown is not all about unions flexing their political muscle. “Some of it’s around the timing of current economic conditions, where you have high inflation and businesses trying to cut costs.

The problem in many of these potential strike actions is that there is a wide discrepancy between what business offers and what unions want. It can even be a difference of 6% [in pay-hikes] offered and 15% asked.”As a corollary of his “broad view” approach, Davies is not overly concerned by the nationalisation talk either. “There has been a sea change in mineral rights already,” he says, referring to the Mineral and Petroleum Resources Development Act of 2002, which vests ownership of mineral deposits in the state. “A radical shift to the left remains unlikely. The rhetoric of radical policy still gets a lot of airtime. But behind that, I think the power relations are more against the Youth League and more for the centrists.”

Not that Davies believes there won’t be a change in policy at some level. “The appointment of Ebrahim Patel and Rob Davies is a sign of the strengthening of leftist thinking,” he concedes. “There hasn’t been any clear indication on what the ultimate direction will be. It could wind up in inertia, especially if Zuma takes a step back and allows the debates to continue.”

This, it can be argued, Zuma is already doing. As an article in the Mail & Guardian suggested in late June, while Zuma maintains his “hands-off, ceremonial approach” the country is in fact being run by planning minister Manuel and ANC secretary general Gwede Mantashe – with each “steering Zuma in a different direction.” Mantashe, this argument goes, who also serves as chairperson of the SACP, is the de facto Big Man in Luthuli House, from where he keeps “deployed” cabinet ministers in check and holds government accountable to the ANC alliance. Manuel, on the other hand, is seen here as Zuma’s most trusted policy advisor – an unflinching enemy of labour and the unions who, as a high-level source told the M&G, is “effectively playing the role of prime minister.”

The stalemate, if it continues, must ultimately be good for business – because it’s a stalemate in which the investor-friendly status quo remains. Davies, while he raises a telling point about the elections of 2014 and 2019 – where does the left take its support if the perceived victory of 2009 is revealed as hollow? – is hardly about to advise his clients to disinvest from South Africa en masse.

The fundamentals are good, he says, and the country is an attractive destination in a number of sectors. “Also,” he adds, “it may not be clear to everybody, but the ANC has already shifted left from GEAR. Most of those policies were discarded years ago. That’s why we haven’t seen a sudden shift in thinking between Mbeki’s government and Zuma’s.” The final word, though, should probably go to Foster, a first-rate American journalist who genuinely cares whether (and how) Jacob Zuma will use his wide-ranging popularity for the good.

Writes Foster: “Zuma’s rise – or the emergence of some other populist like him – was, perhaps, inevitable in South Africa, given the collision of political expectations and economic realities. The question now is whether he’ll be capable of connecting the populist energy he tapped in his campaign to some larger, transformative national purpose, or whether his administration will be characterised by crude redistributive measures and patronage, starting the country down a path that seldom leads to long-term prosperity.”

Kevin Bloom, an award-winning South African journalist, is currently a writing fellow at the Wits Institute of Social and Economic Research (WISER). His first book, Ways of Staying, a narrative non-fiction journey through selected concerns of contemporary South African life, was released by Picador Africa in May 2009.

Business Landscape

A Look At Youth Mentorship During Global Entrepreneurship Week (GEW)

Entrepreneur: A person who sets up a business or businesses, taking on financial risks in the hope of profit.

Kristly McCarthy

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Global Entrepreneurship Week kicks off from 12 November – 16 November. Around the world, entrepreneurs are carving out their paths and are taking matters into their own hands.

Back home, Futureproof wants to instil a culture of curiosity, tenacity and risk taking in every South Africa – young or old, intrapreneur or entrepreneur.

In fact, we go as far as to teach young children from the age of 8-years-old about the art of entrepreneurship as part of our countrywide school program. Most recently, the company has seen success in the Orange Farm area and is teaching 110 Grade 3’s to master the art of entrepreneurship.

To celebrate this week, the team at Futureproof interviewed several well-known entrepreneurs and asked them the big question: ‘What do you wish someone had told you before you became an entrepreneur?’ Here’s what they had to say:

Clive Murray, the founder and CEO of World Water Exchange: “Making money is easier than keeping it. Don’t change the rules you make for yourself when times get tough.”

Marc Ashton, former MD of Moneyweb and CEO of Dynamic Body Technology:

  1. Don’t start a business…
  2. If you are feeling foolish and still wan to then do it with partners.
  3. If you are doing it with partners then lay out the terms of divorce upfront.

CEO and Co-Founder, Lisa Illingworth says that Futureproof has made it their life’s mission to aid children with the real-life, hands-on skills that they need to succeed as entrepreneurs.

“Text books just don’t teach the things that entrepreneurs really need to know. So much growth and economic activity can be realised out of entrepreneurial ventures, but we are all too scared to take the leap… why? Because we don’t feel supported and we would probably prefer to stay in our comfort zones”.

Related: The Mentorship Challenge – Behind Every Great Leader Is A Great Mentor

In fact, while entrepreneurship could literally catapult our country, an article in the Daily Maverick in 2017 described entrepreneurship in South Africa as ‘Sitting backwards on a donkey riding further away’.

Issues that entrepreneurs will come to face, even in their younger years is that of funding issues, lack of mentorship and opportunities, low skill levels, compliance and of course, poor standards of education and lack of access to education.

The current structure of the education system was initially designed in an entirely different age to achieve economic outcomes that are no longer viable due, in large, to the rapid innovation and adoption of technology.

“Gearing the country up for the forth industrial revolution is proving to be a challenge in both the public and private sectors. Are we really ready and how we use this particular week of the year to relook the problems and derive opportunities from them?” says Lisa.

Lisa provides context on the issues that entrepreneurs face. “Imagine this: you have a brilliant idea but no investment. You have no clue where to begin but you take it to the banks and a few potential investors. Without a solid plan and ‘street smarts’, the deals fall through, or you jump through hoops, give away more than half of your company and land up working tirelessly with no returns. This a reality for many who really don’t know how to launch an idea, understand its feasibility and raising the capital they need through mechanisms that won’t cannabalise the business at a later point.”

Lisa says that the country remains hopeful for President Ramaphosa to implement his vision for entrepreneurship as stated in the SONA 2018. “The President stated that ‘establishment through the CEOs Initiative of a small business fund – which currently stands at R1.5-billion – is an outstanding example of the role that the private sector can play. Government is finalising a small business and innovation fund targeted at start-ups’,” she continues.

“We need to change how and what schools are teaching for this to be realised on a large scale and providing the foundations so that these kinds of funding initiatives will have the best possible chance of growth and success”.

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Business Landscape

Make Your Travel Even More Rewarding

From engineers to businessmen, hairdressers, creatives and stay-at-home-partners, the British Airways Executive Club benefits all who join.

British Airways

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The British Airways Executive Club is uncomplicated, free to join on ba.com and from the moment you join, you will benefit from exclusive privileges and rewards, such as upgrades, hotel stays and car rentals with British Airways and oneworld® airline partners.

Besides collecting Avios, which can be redeemed on flights, you will also collect Tier Points every time you travel, allowing you to progress through the different Tier levels within the Club, which are Blue, Bronze, Silver and Gold.

Your Tier status will open up a world of opportunities and added benefits, such as fast track check-in, free seat selection and saving your meal preference selection as part of your Executive Club profile for future flights.

When travelling within southern Africa or internationally on British Airways, Executive Club members from Silver Tier status and up will experience a valuable and enjoyable ‘moment in time’ between checking in and boarding with lounge access into all British Airways eligible lounges. Some of these features include on-site spas, wine tasting from a monthly selection of the finest South African and international wines, a Living Library, private meeting spaces and business facilities to mention but a few.

The more Tier points you earn the sooner you will reach your next Tier status in the Club, which will result in additional benefits, such as bonus Avios, priority check-in, extra luggage allowance, access to over 170 lounges worldwide and enhanced opportunities to afford the luxury of travelling in the British Airways Club (Business Class) cabin.

Related: How I Run An International Business From A Remote Beach Town In The Eastern Cape

british-airways-foodWhen travelling in Club, priority boarding is on offer giving passengers a minute or two to reflect as they settle into the comfort of the business class seats, meaning significantly more space, which can be utilised to work on your next business pitch, read a book on your digital device or stretch out and relax before touching down.

Be welcomed with pre-drinks and a hot towel as you get seated and wait for the rest of boarding to complete as the flight embarks to your chosen destination. On-board hospitality will include a variety of delicious meals, which gets your day off to the best start or ends your trip on a tasteful note. Being an Executive Club Member, your meal preferences can be stored and offered where possible.

As part of the Executive Club you will collect Avios every time you fly and you can even top up your Avios with ease and make use of a collective balance by pooling Avios together within a household account, to reach your dream destination sooner. By calculating earnable Avios and Tier points with the simple calculator available on ba.com, an estimation can be done before booking your next flight.

Take advantage of the opportunity to redeem exclusive awards with Avios by booking reward flights, upgrade flights or spoil friends and family by gifting your Avios.

Appreciate travel more than ever before with The British Airways Executive Club. It’s designed to recognise and reward all passengers, ensuring every journey is exceptional and enjoyable.

Fly with British Airways on its extensive route network within southern Africa and beyond which includes Johannesburg, Cape Town, Durban, Port Elizabeth, Livingstone, Harare, Victoria Falls, Windhoek, Mauritius and London.

For more information and to become an Executive Club Member visit ba.com

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Business Landscape

How Schindlers Attorneys Became Involved In The Landmark Cannabis Case

Everything you accomplish accumulates and eventually comes back to assist you further along in your career. This is how a final year LLB assignment became the basis for a Constitutional Court case.

Nicole Crampton

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Schindlers Attorneys are the law firm that were involved in the landmark Constitutional Court judgement on cannabis use within a private space. Paul-Michael Keichel, Partner at Schindlers Attorneys shares how they came to be the foremost legal experts on cannabis and how they became involved in the Constitutional Court case:

How the journey began

“In 2005, my first year at Rhodes University, whilst studying for Intro to Law, it occurred to me that there were strong constitutional points that could be raised to objectively justify the decriminalisation of cannabis in South Africa,” explains Paul-Michael Keichel.

“In my final year LLB, 2009, I took Constitutional Litigation as an elective (largely motivated by the creation of a timetable clash, which meant that I’d not have to sit another semester of lectures for a module that I had failed the previous year). This provided me with the opportunity to write an assignment titled “A Critical Analysis of Prince and an Objective Justification for the Decriminalisation of Marijuana in South Africa”, in which I composed my argument (based on the right to equality in our Constitution).”

Related: 7 Top Lessons You Can Learn From The US Cannabis Market

The start of the partnership

“Fast forward to 2013 and the Dagga Couple find themselves at Schindlers (where I am a first-year associate) to register their NPC, “Fields of Green for All”. The attorney handling the registration (who I’d also bored with my argument) suggests to the Dagga Couple that they speak to me. It turns out that they already knew of me, because my assignment had (unbeknownst to me) done the rounds on the underground cannabis networks. We get chatting and I rope-in my brother, Maurice Crespi, the managing partner of Schindlers,” explains Keichel.

“We are the only firm out of many approached by the Couple who are willing to take on their trial action against 7 state departments and Doctors for Life to push for a declaration of constitutional invalidity of the laws prohibiting cannabis use/possession/dealing in South Africa. We decide to run the challenge for them pro bono.”

The Cape ruling that started it all

“Prince and Acton et al have their matter heard in the Cape, which resulted in the 2017 Judgment. We run a portion of our trial (including expert evidence from international scientists and doctors – the best in field), but it is rendered part-heard. We then heard that Prince and Acton et al’s matter will be heard by the Constitutional Court in November 2017 and we decide, with the Dagga Couple, to intervene in that matter, upon which it is confirmed that my 2009 assignment forms the on-record basis of a major chunk of Prince and Acton et al’s arguments in support of legalisation.”

“Our involvement in the Constitutional Court was such that we provided clear legal argument and authority to support and expand upon what Prince and Acton et al were trying to say to the Court. Ultimately, much of what we submitted has found its way into the judgment of the Constitutional Court.”

Related: 10 Cannabis Business Opportunities You Can Start From Home

How a final assignment became the foundation for a Constitutional Court case

“So, an idea (bolstered by wanting to create a timetable clash) resulted in an assignment, which provided certain credibility and impetus to cannabis activists. Two of these activists ended up being our clients, which, despite being handled pro bono, has brought Schindlers immeasurable positive publicity, and which, ultimately, contributed to the decriminalisation (and potential future legalisation and commercialisation) of cannabis in our country.”

“Schindlers now has a dedicated “Medicinal and Recreational Cannabis Law” department, through which we will continue to make submissions to parliament, apply for licenses on behalf of our clients, support those who have been arrested and charged.”

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