By Tony Leon : On the Contrary
The barons of our trade union movement atop the Cosatu leadership appear to be the latest recipients of the ancient Chinese curse “be careful what you wish for”.
Flushed with success after helping install Jacob Zuma as president of both the ANC and South Africa, they registered their demand that Trevor Manuel be removed as minister of finance.
They were granted half their wish with his redeployment. But his installation as the new planning czar and minister in the presidency hardly suggests his removal from economic decision-making. Indeed, the fact that he unveiled the government’s medium-term strategic framework strongly indicates that he will remain front and centre of government’s financial planning.
Then Zuma proved no slouch in squaring circles, by replacing Manuel at finance with Pravin Gordhan. This not only calmed the markets, but in a recent speech to the National Council of Provinces, Gordhan indicated that he was not going to carry the can for reckless spending or soaring deficits. Indeed, he advised parliament that South Africa was borrowing to pay for its spending and that the “country could no longer afford its former profligacy”.
It would appear that the new chief is more of a belt-tightener than a tax-and-spend artist.
Next on the Cosatu chopping block was Reserve Bank governor Tito Mboweni. Ironically, it was Tito, in his previous position as minister of labour, who granted Cosatu its full wish list by ramming through parliament the Labour Relations Act in 1995.
I remember phoning the newly installed governor, when he became Reserve Bank chief 10 years ago, and joking that he would have to use the interest rate as a weapon to undo the largesse he had conferred on organised labour.
And so it came to pass that the left-wing labour minister transmogrified into a monetary hawk, inflicting some 10 consecutive interest rate hikes on the country, in part to offset the rigidity in the labour market which he had been instrumental in crafting.
The labour legislation piloted by Mboweni incorporated extraordinarily generous provisions for strikes and work stoppages on matters completely unrelated to issues with employers. This gave trade unions the green light to mount protests against the governor’s policies on interest rates and inflation targeting, with Mboweni being, of course, the principal target.
The big player in those far-off days when parliament enacted the Rolls-Royce model Labour Relations Act, suitable for hi-tech, highly skilled Germany, not unskilled and under-educated South Africa, wasn’t even a parliamentarian.
It was Sam Shilowa, as Mbhazima was then called, who cracked the whip to which my colleagues on the portfolio committee danced. Compared with the power he wielded as Cosatu -general secretary 15 years ago, his status today, as an MP marooned on the opposition benches aboard the sinking Congress of the People ship, is a classic case of reversal of fortune.
In those times Gill Marcus was a rising star, whose billowing kaftans and sandals correctly suggested a no-nonsense parliamentarian unconcerned with the flummeries of fashion, which some of my colleagues preferred to the hard graft of committee work.
She ruled the finance committee with an iron hand, and served thereafter as Trevor Manuel’s deputy. So wherever Cosatu looks today, it will see the hand of Manuel! Not that Gill will be anyone’s patsy, or pushover. She will take the constitutional independence of the Reserve Bank seriously.
My first boss in the Johannesburg city council, Francois Oberholzer, was fond of remarking that “West Park Cemetery is filled with indispensable people”.
The recent conventional wisdom, to which I was a paid-up subscriber, held that there would be market mayhem if Manuel were not retained at finance and if Mboweni were not reappointed.
The august Financial Times of London, for example, editorialised in April that “retaining Manuel in finance would be a good start for Zuma in calming business fears”.
After the new cabinet line-up was announced, in its May 12 issue, it maintained that Gordhan’s appointment “seemed to have calmed business fears that (Zuma) might lurch to the left”.
Closer to home, Business Day warned in mid-June that by opening its mouth on Mboweni, Cosatu “had made it well nigh impossible for him to go”.
“(Government) must now reappoint Mboweni or risk being seen as a puppet of the left,” it reported. Yet after Marcus’s appointment as Mboweni’s replacement, Business Day reported on Tuesday: “Just as the markets were pleased with Gordhan’s appointment, so they should be with Marcus’s ... it is hard to believe that no one thought of her before. She is, by far and away, the best person to take over.”
Of course, the new appointees have yet to be tested, and both confront a financial crisis of biblical proportions. But those who demanded the heads of their predecessors will have to bide their counsel, and bite their tongues, for quite a long while, going forward.
Monday, July 27, 2009
By Tony Leon : On the Contrary