25 AUGUST 2016 – 07:52
THE results of the local government elections have spotlighted and exacerbated the growing clash between patronage and middle-class interests. “Tenderpreneurialism” will attract intensified scrutiny. Incentives to transfer wealth to the poor and the connected will compound.
Corruption and patronage are not synonymous, as some forms of patronage, such as income transfers, can be politically legitimate and morally appropriate. Such measures can also be economically reckless. Distinguishing between alleviating poverty and anaesthetising the poor is vital.
Commentators have made much of how President Jacob Zuma would often be seen chuckling rather than engaging on the issues. He must have been amused at how educated elites underestimated him and the extent to which he entrenched his patronage machine.
SA’s most senior office-holders have now paid a considerable political cost for having belittled the power of electioneering and media to combat state capture. A standoff emerged after the principal actors underestimated their adversaries’ strengths and strategies.
While downgrading racism, the election results are also reranking and reinvigorating SA’s second-tier political fissures. Within the ruling party, the communists and unionists will continue to lose clout, as cronies find common cause with populists through disdaining middle-class interests. At the centre of the skirmishes will be “clever blacks” who do not require patronage.
The major battle line now features SA’s struggling middle class combating the country’s poor and their politically potent patrons. Transitioning from racial divisions to class warfare highlights awkward progress and fresh challenges. The essential task is to convert the poor to middle class, not to set the two groups against each other.
Redistribution as reparations invariably becomes toxic. It spawns cronyism, which inevitably comes up short. Broad economic impairment precedes patronage retreating, and such dynamics describe the new phase of SA’s political and economic tensions.
Consider land. Most of the world’s nearly 1-billion food-stressed people are farmers. Very often below-ground resource endowments discourage the social co-operation necessary for broad prosperity — see Venezuela today or Zimbabwe this century. Conversely, consider how high urbanisation and a diverse middle class hint at SA’s potential to provoke and develop ambitions.
Tenderpreneurialism is simply political power feeding greed, whereas tactics to derail the ambitions of the poor demand ruthlessness. The poorer people are, the cheaper it is to capture their voter loyalty with modest services and grant programmes.
Nothing can compete with isolated smallholder farming and a lack of minimal education to curtail youthful ambitions. Traditions and ethnic loyalties can also be twisted and exploited. A strategy common among despots of resource-rich countries has been the prioritising of sport stadiums ahead of schools and clinics. The masses conclude that their leader generously provided the forum, yet they were destined to be spectators not stars.
A problem for SA’s patronage set is that the country has spawned so many role models. Waves of parents, aunts and uncles, and older brothers and sisters, have migrated from rural peasantry searching for formal sector employment.
While the dimensions and direction of SA’s patronage are unsustainable, their purveyors are well positioned to control national government until 2024.
The economy is set to stagnate indefinitely. A particularly meaningful measure of progress, “sustainable middle class growth”, if it were accurately tracked, would depict SA moving backwards.
As fiscal constraints tighten, manoeuvres will be tested to redirect public and pension assets. Often the poor will be among those who reap immediate benefits. Yet their, and the country’s, long-term growth trajectory will suffer.
Cronies oppose pro-competition policies, as do other elements of SA’s ruling coalition. They are collectively antagonistic towards the ambitions necessary to build momentum through commercial gains. Rather, patronage and anti-business policies have combined, thus hobbling consumer incomes and business interests.
The good news for the crony crowd is that other power-holders must negotiate with them. The bad news for everyone else is SA has entered a perilous stalemate period.
Published in Business Day