Gordhan on a leash
In political science, students studying the theory are often told that the most dangerous time for political leaders is when they begin to challenge the status quo. How apt therefore that the current saga of Finance Minister Pravin Gordhan fits so well into this scenario.
With rumours swirling, South Africa is being treated to an unedifying public spectacle of political intrigue befitting more authoritarian regimes like China and Russia where state (and governing political party) linkages into business and crony capitalism combine in a toxic mix with the survival of political personalities and connected elites.
Whatever the legal merits of suggested action against Pravin Gordhan, it’s the context in which this all occurs that points to deep concern.
The use of state agencies like the Hawks and the NPA to further a possible political agenda against a Finance Minister keen on disrupting existing patterns of power and patronage suggests a willingness to forgo critical economic and governance reforms in exchange for protecting the beneficiaries of political benefaction.
All this whilst apparently impervious to the effects on domestic and global investor confidence.
South Africa’s economy, in the words of the Reserve Bank's Deputy Governor Daniel Mminele, is ‘flat on its back’. Simply put, we are staring down a crisis – some of it as a result of global factors but a major slice as a result of domestic policy own-goals and a broader implementation paralysis.
Inefficiencies abound. From tragically weak educational outcomes, to moribund state owned enterprises to a record unemployment rate. Clearly, a dramatic sea-change in direction is required.
So, when a Finance Minister – already regarded as a choice imposed on President Zuma from outside – attempts a process of the ultimate ‘turnaround’ strategy, those with vested interests in the old order become uncomfortable.
Clearly, the last thing that South Africa needs is the demise of yet another highly respected Finance Minister. Although denigrated by so many in the governing party, the markets will be the ultimate arbiters as they were in December. Under current conditions of political in fighting, any removal of Gordhan can unleash a variety of dire economic consequences for us all.
Despite the dramatic news reports of Gordhan’s imminent arrest, even the most myopic and ardent benefactor of existing policy largesse should realize the deleterious effects of such an action not only on the broader economy, but in eventually destabilizing the country and their very own ability to continue in the pound seats.
Gordhan represents one side of the dual voice of the ANC today. Distanced from the Machiavellian machinations of his political masters, he’s the one sent out to be the public face of reason and sanity when confronting those pesky ratings agencies.
Gordhan is the market-friendly conscience of excess and crony capitalism and is a vital cog in government’s domestic and global public relations machine to keep business relatively placated in a sea of uncertainty and mistrust.
Even to those desperate to either hold onto their profitable connections or those whose nefarious activities are in danger of being exposed, Gordhan is an important stabilizer.
But Gordhan is at the same time being taught a very tough and potentially dangerous lesson by those who fear his ascendancy. They will tolerate his position only up to a point. Where it begins to threaten their positions, they will act against him.
What we have therefore witnessed over the weekend and are likely to see over the next few weeks, is a reformist Minister of Finance directly confronted by those who feel threatened by his apparent desire to shake up aspects of governance within the ruling party.
His enemies have fired a direct broadside to him and have laid out in stark terms the consequences of his actions. Should he wish to disrupt the networks in key state owned enterprises like SAA, they will act. Should he act to clean up tender irregularities that have benefited a select few, they will act. And the list goes on.
So Pravin Gordhan now looks set to live on a short leash. Having clipped the wings of President Zuma’s attempts to appoint Des Van Rooyen, the Zuma camp is fighting back to clip the wings of Gordhan. Gordhan has been reminded of just how far he can go – and just how strong the vested interests are in potentially acting against him should he stray too far off course.
It is an untenable position not only for the person of Gordhan but also for the country as a whole. It will once against spell a period of negative publicity for the and further distance investors from committing capital. It can endanger our credit ratings thus raising the cost of capital.
Above all else, South Africa cannot continue to lurch on a weekly basis from headlines exposing how its Public Protector is facing death threats or how its Finance Minister may be arrested. It is a decent into a ‘banana-republic’ style of politics that should be resisted at all costs.
Once again, a combination of business, civil society interests and pragmatists from across the political spectrum need to step in – and up to the plate. Now is the time.
Daniel Silke is director of the Political Futures Consultancy and is a noted keynote speaker and commentator. Views expressed are his own. Follow him on Twitter at @DanielSilke or visit his website.