There is no 'GNU'

Initial thoughts about the ANC-DA coalition and its implications

Contrary to the hundreds of media reports and headlines, there is no ‘government of national unity’ (GNU) in South Africa at the moment.

It is understandable that, as fundamentally political entities, the African National Congress (ANC) and Democratic Alliance (DA) would seek to frame their coalition this way: the failure is on the part of editors, journalists, commentators and analysts merely swallowing and regurgitating that rhetoric. In most cases that is because the vast majority of media and civil society actors in South Africa are hopelessly partisan – a theme I will keep returning to and demonstrating using evidence. For now let me just start by asserting very clearly: there is no ‘Government of National Unity’ (GNU) in South Africa.

Gnu in a jacket. Gnu_jacket.jpg, CC BY-SA 3.0 <http://creativecommons.org/licenses/by-sa/3.0/>, via Wikimedia Commons.

It makes no sense to use this term for a government that excludes two of the four largest political parties (EFF and MKP). Furthermore, unlike in the transitional period after the formal end of apartheid when the term appeared in the Interim Constitution, ‘government of national unity’ presently has no legal meaning or consequence. Many commentators, including even a constitutional law professor, have conveniently ignored this fundamental difference.¹

---

So, what there is, is a coalition between the ANC and the DA, with relatively small parties added on. Those small parties serve two primary functions. First, their presence helps in maintaining the ‘unity’ rhetoric. Second, parties like RiseMzansi, FF+, BOSA, the IFP and the Patriotic Alliance help shift the ideological centre of the coalition rightwards and in the direction of the interests of funders (Michiel Le Roux, the Oppenheimer Family, and to a lesser extent Martin Moshal). As veteran newspaper editor, ideologue and propagandist Peter Bruce said about coalitions before the elections: “the funders will call all the shots”. (Bruce is very well connected to such funders, senior leaders in the DA and DA breakaways like BOSA, ActionSA and RiseMzansi, as well as to some parts of the Ramaphosa camp in the ANC). In addition to these two key functions, the IFP is crucial for propping up the credibility of the coalition in KwaZulu Natal and ensuring that the coalition controls the government of that province.

In my original assessment of potential post-election outcomes I assigned the highest probability to a coalition that completely excluded the ANC and the MK Party (MKP) if the combined votes of those two parties was less than 50%. The specific scenario I assigned the next highest probability to was an ANC-DA coalition, with two caveats:

i. The ANC would need to lose by a substantial margin

ii. Ramaphosa would need to win internal contestation within the ANC after leading the party to a historic defeat.

Both those things have happened, so in my view the current outcome – an ANC-DA coalition with frills – is not a surprise. And as I wrote at the time, “this has also been the scenario I have heard most often whispered about behind-the-scenes”.

There is a lot of analysis needed of how and why this coalition came about, how it will play out and what the longer-term consequences will be. For now I will just discuss two additional issues. First, my broad view about the implications of the coalition for the country. Second, the likely composition of the Cabinet.

Implications for the country

The most obvious implication of the current coalition is that it will be good for relatively wealthy and privileged South Africans, and especially large corporations, in the short- and medium-run. That would also have been the consequence of a coalition without the ANC and MKP. This is reflected in the strengthening currency and rapid increases in share prices on the Johannesburg Stock Exchange (JSE).

Some commentators like Nassim Taleb like to emphasise the notion of ‘skin in the game’: ‘put your money where your mouth is’. In terms of my own small investment decisions in advance of the elections: I brought back most of my foreign investments into Rands and invested as much as I could in South African equities. So far those decisions look like they will be quite profitable. However, I am not under the illusion that what is profitable for the privileged few who have such investments is what’s best for the majority or the country.

There is, however, some overlap between those things. All else equal, it is good to have extra foreign investment into the country – even of relatively superficial kinds that just increase share prices. Higher share prices can mean increased wealth, increased spending and more capital available to companies for investment. A stronger currency can help bring down the cost of imported goods, including fuel, and thereby reduce inflation. Just the positive sentiment alone can lead to higher investment and therefore higher economic growth measured using the conventional, though not unproblematic, metric of growth in Gross Domestic Product (GDP). Almost a century ago the economist John Maynard Keynes observed the importance of what he called ‘animal spirits’ when it came to markets and economic growth.²

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits – of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities. (Keynes, 1936)

While Keynes was critical of some consequences of such dynamics, he was not denying their importance – quite the contrary.

The failure of recent governments – whether at national, provincial or local level – in some areas has been so dire that it would not be hard to secure fairly rapid improvements. In some areas such as energy, there is some evidence to suggest the Ramaphosa adminstration deliberately failed.³ The coalition in general, and the DA in particular, will be keen to achieve those improvements in order to demonstrate the apparent value of it being in national government.

The DA and its funders – as well as certain foreign governments – will be very keen to be able to claim that ‘post-independence movement governments do better’. And such successes will no doubt be used to campaign for subsequent elections. The good news being: things will improve in important ways over the short- to medium-term. And I think that will happen from very localised issues like potholes and streetlights to national issues like effective infrastructure planning and expenditure. And while the main beneficiaries will be the elites, for political reasons there will be an effort to show very tangible benefits for the poor and marginalised.

This all sounds pretty good, so what’s the bad news? First of all, I think with this election the country’s sovereignty and genuine democracy is gone and will be very hard to get back. I have alluded to some of those dynamics already - such as the role of the Brenthurst Foundation - and subsequent articles on a range of topics will help to underpin this strong claim.

Another issue is that those making these decisions will ultimately prioritise the interests of elites and vested interests over at most a 5 or 10 year horizon. Many decisions will be taken to facilitate private sector rent-seeking targeted at public infrastructure and funds for public sector responsibilities across a range of sectors. The medium- and long-term well-being of the majority will not be well served by that kind of decision-making.

The scope for ‘easy wins’ is also limited, as the DA will discover directly once it enters into national government. The ‘structural reforms’ favoured by the right-of-centre members of the coalition (including in the ANC) and international financial institutions do not actually address any of the country’s fundamental structural problems - in fact, they will worsen some of them.

The composition of Cabinet

As I write this, I have seen an announcement that the new ‘National Executive’ – a term covering both Cabinet ministers and (non-Cabinet) deputy ministers – will be announced at 21:00 South African time. So here is a quick prediction of the composition of the most important positions by type. A ‘typology’ of appointments, if you like. The specific portfolios given to specific individuals are less important than this.

A breakdown of the composition of Cabinet and other Executive appointments by type:

1. ANC ministers favoured by DA funders

2. DA ministers

3. Leaders of small parties (and maybe non-MPs) favoured by DA funders

4. Ramaphosa's ANC allies

5. Appointees to appease Ramphosa's internal ANC opponents

6. Token 'unity' appointments.

I will post an edit to this post with all the announced appointees filed under these six categories afterwards.

I believe that some of the Cabinet posts have been marked out by institutions and individuals linked to the opposition for some time: I will write about one of those fairly soon. The crucial point implicit in the above typology is: it is a mistake to focus on the Cabinet posts as a zero-sum game between the political parties. In reality, there are ANC MPs who funders of the DA would prefer to have in certain posts and therefore such appointments could not really be called ‘a win for the ANC’.

This typology also clearly reflects my views about the importance of political party funders. But that should not be narrowly interpreted. Those funders – like Michiel Le Roux, the Oppenheimer Family, Martin Moshal, Patrice Motsepe and others - have their own interests at heart, but also have political and ideological commitments. And in some instances they act as intermediaries for, or collaborators with, other powerful interests – such as foreign governments. I believe the Executive under this coalition will primarily reflect the confluence of all those interests, within the limits of what the current crop of elected politicians can provide.

Stay tuned for a lot more analysis over the next 6 months.

1. In the broader global context the notion of a ‘national unity government’ is not well-defined but to the extent it has been historically, it referred to coalition governments formed during states of emergency or wars – clearly inapplicable to South Africa which has been extremely stable before and after the recent elections.

2. This pun was unintended.

3. I will elaborate on this at length in future posts.