South
Africa Falters as Unrest Spreads
11
October, 2012
Eighteen
years ago, the African National Congress took control from a
white-minority government that kept black South Africans down.
Now,
ANC President Jacob Zuma leads a black-majority government that has
left many black South Africans behind. Black households earn less
compared with their white neighbors than they did when apartheid
ended in 1994. The gap between rich and poor is wider than when Mr.
Zuma took office three years ago. And Mr. Zuma faces mounting
opposition as he maneuvers for another term.
Disenchantment
with the government has fanned protests across the country. Unrest
erupted in August in Marikana, northwest of Johannesburg, where
police opened fire on striking workers at a platinum mine owned by
Lonmin LMI.LN +1.93% PLC, killing 34 people. It was the most violent
clash between police and workers since the end of apartheid.
Two
more people died on Thursday after a skirmish outside a platinum mine
northwest of Johannesburg, where Anglo American Platinum Ltd. AMS.JO
-1.34% fired 12,000 striking workers last week. One worker was set on
fire on his way to work early on Thursday morning and burned to
death, a police spokesman said. Forty-eight people were arrested
after the incident on charges of public violence, and the police
opened a murder investigation, he said.
Some
of the 12,000 workers laid off by Anglo American Platinum protest
their dismissal and the death of a colleague last week.
Also
Thursday, talks broke down between unions and South Africa's three
top gold producers, leaving production hobbled and some 70,000
workers in limbo. Mr. Zuma told a group of black business leaders
that strikes posed serious threats to the country's economy and its
ability to attract outside investment.
"We
must get the economy back to full steam and create the jobs that our
people so desperately need," he said Thursday.
The
unrest is exposing a stark reality—South Africa is falling behind,
even in Africa. When the ANC took control of South Africa in 1994,
its advanced economy and relatively smooth transfer of power stood
out. That same year, in Rwanda, some 800,000 people were killed, most
of them members of the ethnic Tutsi minority shot or hacked to death
by their neighbors, pastors or policemen.
President
Paul Kagame, leader of the rebel force that ended the genocide in
Rwanda, has presided over a robust economic recovery, though critics
accuse him of harassing political opponents. (Mr. Kagame has
dismissed those allegations.) The East African country has posted
annual economic growth near 8% since 2004, more than double South
Africa's 3.7% growth rate during the same period.
Mr.
Kagame's government has lowered barriers for investors and
aggressively courted international banks, telecoms and hotel chains
to set up in the country. South Africa, meanwhile, has tried to block
some investments, including Wal-Mart Stores Inc.'s WMT +1.07%
ultimately successful bid to enter the country last year.
"Investors
from the West…have grown a little bit arrogant," explained
Gwede Mantashe, the ANC's secretary-general. "They will come
here if they think they can make money. I have no illusions about
companies coming here because they love us."
Meanwhile,
in Zambia, democratic elections in 1991 led the government to scrap a
policy of mine nationalization. Heavyweights including China
Nonferrous Metal Mining (Group) Co. Ltd. and Glencore International
AG GLEN.LN -0.41% have invested some $8.8 billion in the decade
through 2011. By contrast, South Africa is debating nationalization
and other ways to intervene in the mining sector, while major mining
companies like BHP Billiton Ltd. BHP.AU +0.87% are scaling back
investment and selling operations.
It
isn't just slower growth rates causing political pain for Mr. Zuma.
Brazil's economy has grown around the same pace as South Africa's,
but President Luiz Inácio Lula da Silva left office in 2010 with an
80% approval rate because income equality had diminished and 35
million Brazilians had ascended from poverty into a nascent middle
class. His successor, Dilma Rousseff, has pledged to pull 16 million
more impoverished Brazilians into a better life by the end of her
first term.
In
South Africa, income inequality has worsened since Mr. Zuma took
office in 2009. His approval rating is around 40%.
Some
big things have improved in South Africa under the ANC. Nearly all
citizens have access to electricity and clean drinking water today,
compared with less than two-thirds in 1994. Welfare grants to 15
million poor parents and seniors have cut the proportion of South
Africans living on less than $2 a day to 5% from 12% in 1994.
"We
have achieved a lot already in only 18 years, which is an indication
of further progress to be made," Mr. Zuma said at a local
governance conference in September. "This fact gets lost
unfortunately in the hurly-burly of competitive politics."
South
Africa wasn't fated to struggle. After winning the first-ever free
vote in 1994, the ANC took the reins of an economy that boasted
Africa's biggest stock market and most advanced infrastructure.
President Nelson Mandela instilled a spirit of reconciliation and
left the white minority in control of the economy. He used steady
economic growth to fund social spending to black villages and
townships.
His
successor, Thabo Mbeki, cut spending and privatized state
enterprises. He also prioritized black ownership and hiring. But he
was slow to tackle the HIV-AIDS epidemic that exploded in the 1990s
and eventually killed hundreds of thousands of South Africans.
Mr.
Zuma has drawn flak for refusing to fire officials for poor
performance. An education minister has kept her post despite a
failure to deliver textbooks for six months to more than a million
students in Limpopo province. Mr. Zuma said he was enlisting a
"presidential task team" to explain the mix-up. The
minister, Angie Motshekga, said in June that the government's critics
were sensationalizing an isolated failure.
"It
is not that the Zuma administration is passing bad laws or doing evil
things," said Allister Sparks, a South African author and
political analyst. "It is that it is doing nothing at all while
serious problems compound themselves."
The
ANC governs in an awkward coalition with the South African Communist
Party and the Congress of South African Trade Unions—even as top
ANC leaders have become some of the country's most visible business
tycoons.
Moody's
Investors Service last month downgraded South Africa's debt one notch
to Baa1 from A3, saying the government appeared increasingly unable
or unwilling to address labor strife and inequality.
"I
don't know how they win back investors' faith in South Africa,"
Peter Davey, a metals and mining analyst at Standard Bank PLC.
"They've almost crushed it."
Mineral
Resources Minister Susan Shabangu said in August that her department
would undertake a "process of collaboration" with mining
companies and South Africans to regain the trust of both investors
and workers.
South
Africa's union-driven wage hikes have deterred many foreign companies
from tapping the vast pool of unskilled labor. At the turn of the
century, some of South Africa's best-known companies, such as Anglo
American PLC and SABMiller SAB.LN -0.04% PLC, moved their primary
exchange listings to London, where it was easier to raise funding. As
a result, the country lost tax revenue.
The
Marikana miners' strike started as a power struggle between two
unions seeking to represent disgruntled workers living in cramped
hostels or in shacks without running water or electricity. When the
strike started in August, the National Union of mine workers, a
political ally of the ANC's, blamed an attempt by its young rival,
the Association of Mineworkers and Construction Union, to recruit new
members. When it ended the union said mine owners "exploiting"
workers were to blame.
"Marikana
is just an example of monumental leadership failure," said
Mamphela Ramphele, a veteran of the antiapartheid struggle and a
former World Bank managing director. Speaking in August in Cape Town,
Ms. Ramphele said "the unions, Lonmin, police…and of course
the president were all missing in action."
Through
his office, Mr. Zuma declined requests to be interviewed. His
spokesman, Mac Maharaj, defended the president's actions in the wake
of the shooting, including his appointment of a judicial commission
to investigate it. "From the time that violence arose the
president has been deeply proactive," Mr. Maharaj said.
Born
in the rural Zulu heartland to a domestic worker mother and a
policeman father who died when he was young, Mr. Zuma melds an
easygoing image with the instincts of a veteran politician.
But
his populist appeal has been dented by scandals. Corruption charges
against him linked to a government arms deal were dropped in 2009, a
month before he took office. Mr. Zuma said at the time that the
charges were politically motivated. Last October, he fired two
ministers amid allegations that they violated ethics codes and
misspent public funds.
In
December, 3,000 ANC delegates will vote on whether to keep him as
their party leader. He needs that mandate to seek a second
presidential term in 2014, and support isn't assured. "If we
mess up in the ANC, we have messed up for the nation," said
Mathews Phosa, the ANC's treasurer general. He said someone was
likely to challenge Mr. Zuma, though no candidates have stepped
forward.
The
ANC-led government hasn't gone far enough in addressing unemployment
and income inequality, Mr. Maharaj, the president's spokesman,
acknowledged. But he defended what he described as Mr. Zuma's
collaborative approach to policy-making.
"It
may appear to some as too slow, it may be described as indecisive,"
Mr. Maharaj said. "But the fact is, carving a path forward by
talking between labor, business, communities and government is one of
the most delicate political acts."
Meanwhile,
Mr. Zuma's allies in the ANC have sought to whip up support for the
embattled president. In May, thousands of protesters filled the
streets of Johannesburg to demand a local art gallery remove a
painting that depicted the president with his genitals exposed.
"This
government appears to be mostly using its forces to stay in power
rather than to create a vision for South Africa," said Greg
Mills, director of the Brenthurst Foundation, a Johannesburg think
tank.
Mr.
Maharaj said it was inevitable that the government be "bedeviled
with accusations that the incumbent government is neglecting urgent
tasks" as the ANC leadership conference approaches. He said, "I
think there is no evidence that President Zuma has at all slowed from
attending to all those tasks at the community level, in the country,
as well as in Africa and the world global economy."
Mr.
Zuma's travails deepened after the police opened fire on miners at
Marikana. That day, Mr. Zuma announced he would rush home from a
political summit in neighboring Mozambique to deal with the crisis,
but didn't arrive for another 24 hours, when it was too dark to visit
the site of the shooting. He didn't speak to the protesters for
another five days.
"President
Zuma didn't come to hear us and what we want soon enough," said
Siyamcela Male, a 26-year-old Lonmin miner. "The ANC doesn't
want to help us. They want our vote and then they disappear."
Mr.
Maharaj said criticism about the timing of the president's visit was
misplaced, and "doesn't help to find a way forward, it only
looks back over one shoulder."
Still,
Mr. Zuma's critics made the most of his response. Among Mr. Zuma's
fiercest critics is Julius Malema, a youth leader who was expelled
from the ANC earlier this year for sowing divisions in South Africa's
ruling party. Prosecutors recently charged Mr. Malema with money
laundering. He was also hit with a nearly $2 million bill in unpaid
taxes by the revenue service. Mr. Malema appeared in court recently
but didn't enter a plea for the money-laundering charge. Outside of
court, he said that he has done nothing wrong and that the
accusations were politically motivated.
Mr.
Malema was the first top politician to visit the striking miners
after the shooting. "Many are afraid to come close to you,
especially those you elected," said Mr. Malema.
Mr.
Zuma arrived at the scene four days later. Shielded from the sun by
aides holding broad umbrellas, he apologized for coming late. He said
he needed to meet with mine executives and police before hearing the
workers' side of the story.
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