Like many countries, SA enjoyed a period of apparent prosperity during the years of Thabo Mbeki's presidency. The sad truth is that much of the prosperity was chimerical. It was built mainly on the soft sands of high international commodity prices, global capital flows and a consumer spending boom that ran too far.
It was also an era of neglect, decay and lost opportunities. Orthodox economic policies helped create an illusion of soundly based growth, but this was accompanied by failures in too many areas.
He can continue the politics of division and illusion or unify and build an economy that can uplift all sectors of society |
Among the most worrying of these was the deterioration in the education system and the loss of skills. Another was the neglect of infrastructural investment, the kind of spending that creates jobs and helps make cyclical expansions sustainable. Yet another was the alarming increase in the gap between SA's poor and wealthy.
After 15 years of ANC rule, many unemployed and low-income workers feel let down, excluded and frustrated. That is partly why SA now has a populist president. Though Jacob Zuma has yet to explain his policies, he has captured the support of the masses and those who claim to speak for them, such as the trade unions.
Now he faces the real choices. He can continue the politics of division and illusion, or he can seek to unify and build an economy that can uplift all sectors of society. He cannot hope to do both of these.
Zuma begins his presidency in the face of considerable scepticism, locally and internationally. The FM has repeatedly argued that Zuma was not a suitable candidate to lead SA, partly because of his baggage of scandals and corruption charges (now dropped under dubious circumstances), rape allegations and some of the things he said during his trial.
The doubters must accept that Zuma is now in power for at least the next five years. The ruling ANC was returned to power with a large majority and that must be respected, though it is significant that its majority declined in every province except KwaZulu Natal, which is Zuma's domain.
Like his predecessor, Zuma can be enigmatic, though in different ways. He gives assurances about consistency in economic policies but also gives nods and winks towards change. He rose to power with the support of the masses and leftwingers, but also with the backing of some of SA's new tycoons.
He will face enormous temptations to govern in ways that may benefit his supporters at the expense of the rest of the country. Every politician faces demands for payback. For Zuma, these demands may be tough to ignore.
To his credit, Zuma said at a recent public meeting that he will be the president of all South Africans. Now he must carry out that promise - and make everyone believe it. Divisiveness, opacity and remoteness were among Mbeki's more corrosive failings.
Now that he is in power, Zuma needs to explain his policies, and how he will ensure delivery, as soon as possible. He should deliver a clear message and then be consistent. International investors do not always like the politics of countries they invest in, or the personal backgrounds of their leaders, but they do expect consistency and predictability.
The announcement of Zuma's cabinet in coming days will tell us more about how he intends to run his government. But the president will be responsible for the leadership, strategy and delivery.
If he is to succeed, he must end the creeping culture of patronage and corruption. And government and provincial departments need to become more efficient and proactive. This, rather than shortage of capital, is the cause of a failure to invest in housing and infrastructure.
Much greater efficiency in the civil service and in ministerial offices now seems almost beyond the grasp of this government, considering that performance seems to have deteriorated in most departments except finance. However, as any business manager will confirm, operational results are just as important as having a wish list.
Zuma will inherit an expanding welfare state in a developing economy. Its rationale may seem laudable, and it has helped many of SA's poor cope with the downturn, but there are strict limits to its affordability. Expansion of welfare payments will not create sustainable jobs or new productive capacity.
Zuma should unequivocally state his intention to maintain orthodox economic policies, with fiscal and monetary prudence. That would be an important reassurance for investors, more relevant than the identity of the next finance minister.
Excessive and premature cuts in interest rates, aimed at pacifying influential leftwingers, could lead to a surging current account deficit, a collapsing currency, rising inflation, and greatly diminished prospects for expansion.
Among the most important challenges facing the new president is the deterioration of SA's education system and the loss of skills. This has been one of the most appalling - and unforgivable - failures of the past 15 years. Determined efforts should be made to recognise and reward (and train) good teachers, starting at primary school level. Standards have to be lifted.
Inadequate skills creation and retention seriously impedes SA's capacity to achieve sustainable growth and create jobs. It undermines international competitiveness and condemns many South Africans to a life of struggle. As shown in recent months, we cannot keep relying on high commodity prices or inflows of foreign portfolio capital.
