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THE CURSE OF RISING EXPECTATIONS

On 10 April 1993, at a highly sensitive stage in South Africa’s constitutional negotiations, a Polish right-winger named Janus Walusz shot and killed Chris Hani, leader of the South African Communist Party (SACP), in the driveway of his home on the East Rand, provoking fears of widespread unrest. Three days later, Nelson Mandela, then president of the recently unbanned African National Congress (ANC), made the following extraordinary appeal during an address broadcast on national television and radio:

Tonight I am reaching out to every single South African, black and white, from the very depths of my being. A white man, full of prejudice and hate, came to our country and committed a deed so foul that our whole nation now teeters on the brink of disaster. A white woman, of Afrikaner origin, risked her life so that we may know, and bring to justice, this assassin. The cold-blooded murder of Chris Hani has sent shock waves throughout the country and the world. … Now is the time for all South Africans to stand together against those who, from any quarter, wish to destroy what Chris Hani gave his life for – the freedom of all of us.[1]

On 17 June 1992, about ten months previously, 40 residents of the Joe Slovo informal settlement in the township of Boipatong in the Vaal Triangle had been hacked to death by hostel dwellers belonging to the Inkatha Freedom Party (IFP), a rival party to the ANC, resulting in the ANC suspending its participation in the constitutional negotiations. And on 28 March 1994, less than a month before the first democratic elections, 19 members of the IFP, many armed with spears and shields, were fatally shot outside Shell House, the ANC’s national headquarters in the Johannesburg central business district (CBD), prompting the government to declare a state of emergency across much of the East Rand and Natal. Indeed, my colleague at the South African Institute of Race Relations (IRR) Dr Anthea Jeffery estimates that about 20 000 people were killed in political conflict in the decade before South Africa’s first democratic elections.

South Africa seemed to face a dark and uncertain future. Even if the country managed to avoid a civil war, many doubted whether the ANC, a socialist liberation movement long supported by the Soviet Union, could possibly govern South Africa. Boardrooms and dinner parties were rife with fears that the new government would wreck the economy by expropriating land and nationalising key industries such as mining, thus destroying the middle classes.

Fast forward to the present, and we know that the ANC has not ruined the economy, or turned South Africa into a third-world basket case. Neither have we descended into civil war. In fact, life in the suburbs continues as it has done for decades, with braai smoke rising around swimming pools. Shopping centres have proliferated, and are more opulent than ever. Coffee shops have opened in Johannesburg’s CBD along the route of the 1994 Shell House march, and the high-end food and clothing retailer Woolworths recently opened a branch a few blocks away. The ANC government has abandoned many of its socialist ideals, and has built a high-speed rail link to ferry business people from the glittering business metropolis of Sandton to the newly refurbished OR Tambo international airport, bristling with shops and restaurants in sharp contrast with the stark concrete air terminal maintained under apartheid.

For years, suburban dinner parties were dominated by conversations about violent conflict and the spectre of socialism; today, the heat is provided by government’s attempts to instal an electronic tolling system on Johannesburg’s upgraded freeways. This is an extraordinary outcome, considering that some of our fellow countrymen stocked up on shotgun ammunition and tinned food ahead of the 1994 election.

Return to the night when Mandela begged the nation ‘from the very depths of my being’ to remain calm, and ask what it would have been worth to you – as the country teetered on the edge of an abyss – to know how things would actually turn out over the next 20 years. Go back further to the infamous Rubicon speech of 15 August 1985 when then State President PW Botha waved his finger at the world and declared that the apartheid regime would not bow to reformist pressures. The Cold War was at its height. White conscripts were patrolling the townships, and fighting Cubans in Angola. The notion that, 20 years later, the last leader of the National Party (NP) would be the minister of tourism in an ANC government was simply unimaginable, requiring a chain of events that almost every analyst would have classified as impossible.

But the impossible has happened. And South Africa is not unique. The recent upheavals in North Africa that led to the collapse of the governments of Tunisia, Libya, and Egypt caught the whole world by surprise, bucking trends that had kept the governments in those countries in power for decades. The trouble, as the American scenario consultant Ian Wilson has put it, is that: ‘However good our futures research may be, we shall never be able to escape from the ultimate dilemma that all our knowledge is about the past, and all our decisions are about the future.’[2] Put differently, we face the seemingly impossible challenge of developing an understanding of the future that is as sound as our knowledge of what has happened in the past.

Questions about our future

For even though we avoided the abyss 20 years ago, we remain concerned about the future. Perhaps it is the discomfort of living in a highly unequal society. Perhaps it is the fear that the transition of 1994 did not go far enough, and that the real revolution still lies ahead. Perhaps we believe that the uncomfortable truce struck between the (largely black) government and (largely white) middle class may not hold.

Over the past five years, my colleagues at the Centre for Risk Analysis (CRA) – the Institute of Race Relations’ consulting arm – and I have made hundreds of presentations to corporations, government departments, and foreign diplomats on the likely evolution of South Africa’s future. In July and August 2013 alone, two major mining companies, one automobile manufacturer, a prominent chamber of commerce, and a European embassy asked us whether we thought South Africa had enough of a future to make it worth investing in. The word ‘disinvestment’ is being heard for the first time in 15 years.

The questions we increasingly confront in the course of our interactions with these sorts of role players are also asked by more and more ordinary members of our society. Will the increasingly angry poor rise up and seize land, homes, and businesses? Will we ever be free of the fear of violent crime? Will a desperate government sacrifice our democracy in order to help it cling to power? May middle-class South Africans have to flee the country, carrying little more than the clothes on their backs? Is there any reason we will not go the way of Zimbabwe?

Will the ANC survive three more elections, or will it be swept from power in events as dramatic as those in Tunisia, Egypt and Libya? Can the Democratic Alliance (DA) under Helen Zille defeat the ANC at the polls? What would life be like under a DA-led government? How seriously should we take Julius Malema and his Economic Freedom Fighters (EFF)? Could people with these sorts of sentiments rise to power, and what would the consequences be?

Will the media remain free? Will property rights be respected, or will the state seize our farms? Will there still be good schools and universities to send our children to? What are the prospects for our children to find work and pursue careers? Will the services provided by the government improve, or will they go into terminal decline? If we have the chance to leave the country, should we take it and build new lives and careers overseas? Occasionally, a particularly insightful individual will ask whether growing socio-economic pressures may force the ANC government to adopt economic reforms that will place the country on a more prosperous economic trajectory.

These questions are not only being asked by members of the elite and middle class. One of the perks of my job is that I am called upon to present briefings on the future to a hugely diverse range of people and groupings, from khaki-clad farmers in Mpumalanga to militant youth activists in the Johannesburg CBD. While they view the country in very different ways, they all ask the same questions – although they seldom believe me when I say that their concerns are shared by those whom they see as the ‘other side’, and even as ‘the enemy’.

A decade hence, will our middle classes still be lounging around their braai fires and swimming pools, saying how silly it was to worry that we might go the way of North Africa or Zimbabwe? Or do we need to start making a Plan B in anticipation of a second, and far less benign, political transition?

The crisis of rising expectations

The answers to these questions will be determined by trends in our economic, social, and political environments. For instance, if the economy performs very badly, expectations among the disadvantaged about rising standards of living will not be met. Should they have the means to do so, they may take steps to change the way in which the country is governed. Should the economy perform well, and meet expectations of rising standards of living, those same people may seek to maintain the status quo. Even a cursory examination of these trends shows that the questions raised about South Africa’s stability are not idle ones.

A point of departure for much of our analysis is that – contrary to popular opinion – significant progress has been made since 1994. However, as we will see later, this very progress has become part of the problem, as it has created what we describe as a crisis of rising expectations. On the economic front, for example, South Africa has managed to recover from the low growth and high debt and deficit levels racked up in the 1980s and 1990s. After dipping into negative territory in the early 1990s, the economy rebounded after 1994, averaging gross domestic product (GDP) growth of more than 4% in 2000-2008 and more than 5% in 2004-2007.[3] Inflation dropped from double digits in the late 1970s to 3-6% for much of the post-2000 period,[4] and the prime interest rate by more than half from the levels preceding South Africa’s transition.[5] The annual change in gross fixed capital formation, or fixed investment into for instance factories, rebounded into positive territory after 1994, having sat at negative levels since 1982.[6]

Despite weakening considerably against the American dollar in 2001-2002, the rand has (until recently) been relatively stable, especially when compared with the extremely volatile currencies that have wrecked a number of post-colonial African economies – with Zimbabwe a notable recent example.[7] Between 2003 and 2006 alone the number of registered income taxpayers in South Africa increased from 3.7 million to 4.7 million people.[8] Moreover, the budget deficit (the difference between what the government receives in income and what it spends) fell from 4.5% of GDP in 1994 to a surplus of 1.0% in 2008.[9] Similarly, government debt fell from 43% of GDP in 1994 to 27% in 2009.[10] GDP per capita, in real 2005 rands, increased from just under R29 000 in 1994 to just under R40 000 in 2013.[11] By 2013 almost 6 million net new jobs had been created since 1994.[12]

This economic progress has enabled great improvements in the socio-economic circumstances of South Africa’s people. In 1996, 64% of South African households lived in a formal house, 79% had access to piped water, and 47% cooked with electricity. By 2011, some 15 years later, these figures had risen to 70%, 90% and 66% respectively. What these indicators do not adequately convey is the scale of the services delivered. For example, South Africa saw the construction of no fewer than 2,9 million new houses, mostly built by the government or by means of government grants. The number of social welfare beneficiaries increased from about 3.5 million in 2001 to more than 16 million in 2013.[13] That makes the state the biggest single source of income for almost a third of households. By 2012, black households were identifying welfare as almost as important a source of income as employment.[14] The government has therefore been responsible not just for improving the physical circumstances in which people live, but also for an unprecedented injection of cash into the lives of poor people.

As a result the ANC has managed to retain more than 60% of electoral support in all four national elections since 1994, and – until recently, at least – the ruling tripartite alliance (comprising the ANC, COSATU, and the SACP) has also maintained a semblance of political unity. There is general respect for the rule of law (with important exceptions); constitutionally guaranteed institutions such as parliament, the public protector, and the South African Human Rights Commission (SAHRC); and the constitution itself. Considering the nature of the pre-1994 dispensation, these are all achievements worth celebrating.

The ANC has therefore not failed in the main to create a ‘better life for all’, as it promised in 1994. Any analysis that does not acknowledge this is flawed, and must necessarily fail to explain what is happening in South Africa today, let alone what may happen in the future.

However, it is equally clear that political tensions are mounting, largely due to the difficulty of meeting ever-­increasing demands. A cruel irony for the ANC, and the government it leads, is that these improvements are fuelling ever-increasing expectations of further improvements that may not be met since not enough opportunities are being created for citizens, particularly young people, to improve their own lives. The irony is best expressed by the veteran ANC member of parliament and former treason trialist Professor Ben Turok who writes that ‘it is consistent with revolutionary theory that people are inspired to struggle when their living standards improve’.[15] This curse of rising expectations lies at the root of much of the social and political instability in the country, and its resolution therefore offers a key to understanding what will happen in the future.

Some negative trends

This curse is exacerbated by the fact that, while much has gone right since 1994, a great deal is also going wrong.

On the economic front, South Africa is unlikely to benefit again from the happy coincidence experienced in the early to mid-2000s of a commodity boom, declining interest rates, low household debt levels, and a weakening rand. Since then, global financial crises have dampened international credit markets, and the domestic household debt-to-income ratio now exceeds 80% – up from 50% in the early 2000s.[16] As a result, consumer spending, which accounts for more than 60% of GDP, is unlikely to boost economic growth to the extent it did in the early to mid-2000s.[17]

Given this, it is questionable whether we will soon reach or exceed the growth levels of about 4% of GDP experienced in 2000-2008. As the Minister of Finance, Pravin Gordhan, pointed out in his medium term budget policy speech on 25 October 2012, growth is likely to average less than 3% in the short to medium term.[18] Subsequently, a number of economists have suggested that a figure of about 2% may be more realistic.

Slower growth and less tax revenue have resulted in the government running out of the money it needs to implement its policies. South Africa’s 2013 budget deficit of 4.8% of GDP was considerably higher than that of other emerging markets such as China, Russia, and Brazil.[19] In 2012, a report by the UN Global Investment Trends Monitor suggested that foreign direct investment in South Africa might have fallen by as much as 43% over the previous 12 months even as it rose in other emerging markets.[20] And, in July 2012, the governor of the Reserve Bank, Gill Marcus, warned that the depreciating currency was becoming a significant inflationary risk.[21] In 2013, after growth forecasts had been downgraded to just 2% of GDP, she again warned that the economic outlook was deteriorating rapidly.[22] Therefore, over the past three to four years, the relatively strong growth, declining debt and deficit levels, and stable inflationary outlook that had characterised the economic environment earlier in the new millennium have all deteriorated.

Furthermore, analysts have increasingly criticised the contradictory nature of economic policy under President Jacob Zuma.[23] For example, the New Growth Path (NGP), developed by the Minister of Economic Development, Ebrahim Patel, envisages a ‘state-led growth path’ as a strategy for establishing a ‘developmental state’.[24] However, the National Development Plan (NDP), developed by the minister responsible for national planning, Trevor Manuel, favours a private sector investment-led growth model, thus contradicting the central thesis of the NGP.[25] Rudolf Gouws, the respected former chief economist of Rand Merchant Bank, now begins some of his briefings on the South African economy with a picture of two angled arrows painted on a road surface, pointing at each other.

Playing with a hand grenade?

The implications of lower levels of GDP growth and investor uncertainty will be felt most acutely in the lives of ordinary people. Despite the government’s welfare and service delivery successes, formal levels of unemployment remain extremely high, averaging more than 25%. Among young black people, aged 15 to 24, the figure rises to more than 50%.[26] Only in 2004-2007, when GDP growth averaged more than 5%, did the country experience a sustained decline in the number and proportion of unemployed people.[27]

Taking a measure of relative poverty as an income of about R1500 a month, in 1996 some 40% of South Africans lived in poverty. Sixteen years later, in 2012, that figure had fallen only marginally to 36%.[28] For too many South Africans, the experience of democracy is a life of poverty.

Another major factor is that of inequality, with its well-documented implications for political and social stability. The most commonly used measure of inequality is the Gini coefficient, which ranks the extent of income inequality in a given society on a score between 0 and 1. (A score of 0 would indicate complete equality, with every person in a particular society earning precisely the same amount, and a score of 1 would indicate complete inequality, with one person in the society earning all the income.) In 1996, two years after the democratic transition, South Africa’s Gini coefficient was 0.60. By 2012 it had worsened to 0.63,[29] making it one of the most unequal societies in the world.

For these and other reasons, a growing number of analysts and politicians – even leading figures in the ruling party – have sounded alarm bells about persistently high levels of poverty, unemployment and inequality. In June 2012, the Minister of Mineral Resources, Susan Shabangu, appealed to delegates at the South African Mining Lekgotla to do more to address the issue of skills shortage and the ‘ticking time-bomb that is the unemployed and unemployable youth of the country’s townships and rural streets’.[30] Similarly, in that same year, Zwelinzima Vavi, then general secretary of the Congress of South African Trade Unions (COSATU), told an international policy conference that unemployment, coupled with dehumanising poverty, was a ‘ticking time bomb waiting to explode’.[31]

Perhaps most alarmingly, in February 2011 the chairman of the South African Institute of International Affairs (SAIIA), Moeletsi Mbeki, wrote in Business Day: ‘I can predict when South Africa’s “Tunisia Day” will arrive. … The year will be 2020, give or take a couple of years.’ Mbeki was referring to the unexpected and violent North African uprisings that year that led to the collapse of the governments of Tunisia, Egypt, and Libya, and destabilised the entire region. He went on to say that ANC leaders were like a ‘group of children playing with a hand grenade. One day, one of them will figure out how to pull out the pin and everyone will be killed.’[32]

In 2012, my colleague John Kane-Berman, then head of the South African Institute of Race Relations, suggested in an address to business and other leaders that the South African political system was approaching a ‘tipping point’.[33] Earlier that year I chaired a private dinner where former president FW de Klerk told business and think-tank leaders that South Africa was approaching some kind of tipping point, and could slide very rapidly if some poor policy options currently on the table were exercised.[34]

Even within the ANC there is growing concern: in July 2013 the deputy president, Kgalema Motlanthe, startled observers by warning that, if the ANC failed to remain relevant to the people, it would run the risk of losing power.[35] In that same month the ANC admitted that South Africa’s economy risked being left behind, and needed to be urgently reformed. Similarly, in 2013, the former treason trialist and liberation icon Andrew Mlangeni warned that without reform the ANC could lose an election.[36]

These observations and predictions did not appear in a vacuum as there are growing signs of popular dissatisfaction with the government’s performance. In the 2009 national elections the ANC won 65.9% of the vote; however, ANC voter support calculated as a proportion of potential voters fell precipitously from 55% in 1994 to just 38% in that 2009 election.[37] Moreover, in that 2009 election, more people chose not to vote than to vote for the ANC.

These indicators must be read alongside rising protest action in poor communities. Commonly labelled ‘service delivery protests’, they are an increasingly prominent feature of post-apartheid South Africa. Often violent, they are triggered by grievances over service delivery and governance, and typically involve mass marches or other mass action, the erection of barricades on public roads, and the destruction of state facilities as well as other property. These protests have escalated significantly in recent years; according to official statistics, crowd management incidents involving unrest (mostly service delivery protests) almost doubled from 622 in 2005/2006 to 1091 in 2011/2012. Between 2009 and 2012 unrest incidents averaged 2.9 per day – an increase of 40% over the 2.1 incidents per day in 2004-2009.[38] In incidents reminiscent of the anti-apartheid struggle, protestors have also torched the houses of local councillors, and some councillors and other local role players have been attacked and killed. Indeed, according to a timeline constructed by Sapa, as many as 50 political figures – many of them local councillors – were killed in the five years prior to 2012.[39]

While the government and ruling party have tended to downplay their significance, the emergence of these protests in a supposedly inclusive constitutional democracy is disconcerting, and analysts are increasingly acknowledging that they are more significant – and more ominous – than the anodyne term ‘service delivery protests’ suggests. Indeed, Peter Alexander, professor of sociology at the University of Johannesburg, has described them as part of a broader ‘rebellion of the poor’, which will not subside unless the government becomes far more effective in channelling resources to deprived communities.[40]

Branching off from the high road?

Therefore, despite South Africa’s transition to democracy, and the significant improvements in living standards that followed, it is clear that new negative trends and fault lines have also emerged. While they are multifaceted and complex, they all come down to whether our country will be able to meet popular demands for improved standards of living.

This is not a question of whether we have made progress or not. The welfare model, together with free state-led service delivery, has driven great improvements in living standards, but this in turn has heightened expectations of future improvements. However, welfare and free services do not contribute to the growth or investment necessary to finance those future improvements. So, every year, poor communities will expect more and more from government, while it will increasingly struggle to meet those demands.

The key question now is whether these expectations can be met – and, if not, what the social and political consequences are likely to be.

If South Africa cannot meet the demands of its people, and will not have the resources to do so in the foreseeable future, then surely it is at risk of sliding into a dark future. This is the view of veteran role players and commentators such as Moeletsi Mbeki, FW de Klerk and John Kane-Berman. It is the view of international ratings agencies such as Standard and Poor’s and Moody’s, which in 2012 downgraded South Africa’s credit ratings, citing the risk of populist pressure undermining sound fiscal policy.[41] It is also the view of respected international publications such as The Economist, which has commented on what it calls South Africa’s ‘sad decline’ while much of the rest of Africa is rising.[42] Even some ANC leaders are acknowledging – in private and even in public – that their time in office may be limited.

Indeed, South Africa’s most respected scenario planner, Clem Sunter, has adjusted his own scenarios downwards, saying the odds of the country dropping out of the premier league of nations had increased significantly.[43] His opinion carries a lot of weight as his celebrated ‘High Road/Low Road’ scenarios of the mid-1980s helped South African decision-makers to identify and understand the ‘tipping point’ that the country was then rapidly approaching, as well as the vital role their decisions would soon play in setting South Africa off irrevocably on one road or the other.[44] South Africa undoubtedly took the high road, as evidenced by its constitutional settlement and the political, economic, and social recovery outlined above. However, this ‘high road’ seems to have reached a new crossroads, centred on rising expectations.

The year 2024 – ten years from now – will feature South Africa’s seventh inclusive national elections, only three national elections away from today. The world we wake up to the next morning may look very different from the one we inhabit today. Just how different is the question this book sets out to answer.