Ismail Lagardien: Sending out mixed signals

The World Economic Forum (WEF) was in South Africa last week. It’s not quite an international organisation like, say, the United Nations or the World Bank, but it is, in some ways, much more important.

The WEF is a gathering of some of the most important people in the world of business, industry, finance, research and innovation and global public policy-making, in general. One cannot say this often enough. Some among us may not like them, others may pray to their gods, but we ignore them at our peril.

Almost everyone who has any understanding of how world affairs work knows that.

It verges on tragicomedy that quite large pockets of people in the ruling alliance seem oblivious of this.

As a middle-income country beset by desperate levels of poverty and unemployment, and quite desperate social conditions, we may want to send out coherent messages.

We have to make a convincing argument that we are serious about political, economic, fiscal and financial management.

We have to convince potential investors or lending agencies that the government can stabilise the economy and manage expenditure responsibly.

It is not just state officials who have this responsibility.

This means we have to convince investors and lending agencies that there is coherence between what we say and what we do at home and abroad.

The government, in particular, has to become adept at playing the two-level game.

This means elected officials have to, simultaneously, engage constructively and progressively with global as well as domestic constituents – with nothing lost in translation.

For instance, the ruling elite cannot tell investors or trading partners that their money will be safe, that the country is on a stable course, while simultaneously getting involved in domestic squabbles, picking fights, undermining institutions, rent-seeking and, well, giving refuge to people with questionable ethics.

The “markets” – those millions of people who buy and sell goods and services around the world daily – make their decisions based on evidence and on futures that are imagined or real.

Consider the following. While Finance Minister Malusi Gigaba was saying all the right things at the WEF meeting in Durban last week, two of his domestic allies, MP Yunus Carrim and the irascible Andile Mngxitama, got into an argy-bargy.

What was meant to be public hearings on the transformation of South Africa’s financial sector turned into yet another episode of “Fight Club in Parliament”.

In this latest episode, Mngxitama stuck to his lines, adding something nasty about Mahatma Gandhi.

To which Carrim replied: “I love being reduced to a cultural stereotype.”

OK, he did not actually say that, but Mngxitama made sure everyone knew about Carrim’s perceived cultural identity. So much then for non-racialism.

Earlier, Gigaba’s advisor, Professor Chris Malikane, assured us that the sequel to “Venezuela: The Collapse” will be made in South Africa, using only indigenous cast and crew (none of those nasty white monopoly capitalists or foreigners) and that people should expect the worst.

Bookmarking the WEF meetings of last week, the president of the country was prevented from addressing public gatherings by angry members of the ruling elite.

This resulted in yet another argy-bargy, this time between the secretary-general of the ANC, Gwede Mantashe, and his consigliera, Jessie Duarte.

“I know it was you Gwede,” Duarte told Mantashe.

OK, I made that up, but Duarte accused Mantashe of sending President Jacob Zuma “out to the wolves” when he asked the president to speak at public events.

Looking back, then, at events over the past week or so, we see the finance minister, all zoot suit and shiny shoes, having a sitdown with the WEF, while his colleagues in the ruling elite went to the mattresses.

The problem for South Africans is that a war between the families in the ruling alliances is a threat to the institutions that were so meticulously built up by former presidents Nelson Mandela, Thabo Mbeki and Kgalema Motlanthe.

These institutions were built with great care, with a breadth and depth in understanding of global political, economic and financial matters.

They now face an onslaught by affiliates of the ruling alliance that seems completely out of sync with the sober discussions Gigaba had at the WEF last week.

It may not be time to panic, well not yet, anyway, but these institutions took time to build, and as Gigaba’s predecessor, Pravin Gordhan, reminded us last week, they can be destroyed “overnight”.

Institutional capture – essentially placing party faithful in positions of power and influence in state and private institutions – contributed significantly to the collapse of Venezuela.

What we have learned in South Africa over the past decade or more is that the minister of finance can do a sterling job in international bargaining, but on the streets and in parliament everybody else should do what is good for the country.

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