ANC reassures big business after win


By Norm Dixon

The overwhelming victory by the African National Congress in South Africa's June 2 national and provincial elections was greeted with approval by big business spokespeople. ANC leaders moved quickly after the final results were declared to ensure the capitalists' confidence was not misplaced.

"[ANC leader Thabo] Mbeki's term will be an opportunity to revisit legislation of the past, like making labour regulations more business-friendly", Saki Macozoma, chief executive of Transnet, one of South Africa's biggest soon-to-be-privatised companies, and a former senior ANC leader, told Associated Press on June 3.

"The ANC are not fools", said Gordon Smith, an economist with Deutsche Morgan Grenfell bank. "They know where the balance of economic power lies."

Predictions, based on early counting, that the ANC would hold an outright two-thirds majority in the national parliament proved inaccurate after the Independent Electoral Commission withdrew almost 1 million votes that had been mistakenly added to the ANC tally. A two-thirds majority would have given the ANC the numbers to change the constitution without having to negotiate with any other party.

The right-wing opposition parties and big business press had made the two-thirds majority the major election issue, despite assurances by Mbeki that, regardless of the size of its majority, the ANC would not fundamentally alter the pro-business sections of the constitution or its Thatcherite economic polices.

Big business's real fear was not that the ANC leadership would suddenly lurch to the left, but that the ANC's mass of working-class and poor supporters could pressure it to make radical changes. That fear is heightened by the presence of many members of the South African Communist Party (SACP) and the Congress of South African Trade Unions (COSATU) within the ANC caucus and the ANC membership.

Blocking the ANC's power to unilaterally alter the constitution was seen as a useful — if more symbolic than real — "check and balance". It was a view not restricted to the right-wing opposition and big business. The May 21 London Times quoted an unnamed ANC minister as saying: "If [a two-thirds majority] happens we lose all excuse for non-delivery, but we can't deliver without a pick-up in the economy — which a two-thirds majority might postpone for even longer."

There were sighs of relief throughout the corridors of power when the ANC fell short of the two-thirds parliamentary majority by just one seat (266 seats in the 400-seat National Assembly).

To underline that it had no intention of changing the constitution, the ANC negotiated an agreement with the Indian-based KwaZulu-Natal Minority Front — a party that collaborated with apartheid — to gain the extra seat that would give the government the two-thirds majority, rather than with the Pan Africanist Congress or the Azanian Peoples Organisation, both of which have criticised the constitution and ANC economic policies from the left.

In his first statements, Mbeki claimed the ANC's victory as an endorsement of its conservative Growth, Employment and Redistribution (GEAR) economic program, even though GEAR was not mentioned in the party's election propaganda.

On June 6, in an interview with the Washington Post, Mbeki reassured international capital that his government would maintain its course: "In the last budget in March, we maintained our position with regard to the reduction of the budget deficit ... [although] people were saying there was a danger we might borrow more [and] increase the deficit in order to buy votes. We were not going to do any such thing. We further reduced the budget deficit and corporate taxes, because we need to create the best possible conditions for people to invest in the economy."

ANC woos Buthelezi

As expected, the leader of the reactionary Zulu-chauvinist Inkatha Freedom Party (IFP), Chief Mangosuthu Gatsha Buthelezi, was offered the powerful position of deputy president. Local and international big business support the IFP's inclusion in the government to counter the influence of the left.

Buthelezi, a long-time collaborator with the apartheid regime, was recently named by the Truth and Reconciliation Commission as being responsible for atrocities against ANC members before the 1994 election. At the height of the June election campaign, huge caches of arms supplied to Inkatha by apartheid regime cops were discovered. The arms had been hidden before 1994 in case Buthelezi felt the need to relaunch his civil war.

Despite his past role as a counter-revolutionary pawn of apartheid, Buthelezi was the last ANC government's home affairs minister. Whenever both Mandela and Mbeki were overseas, Buthelezi was acting president, holding the position 11 times since 1994. It was acting president Buthelezi who signed the order for the South African National Defence Force to invade Lesotho last September.

Powerful sections of the ANC leadership long to merge with the IFP, but Buthelezi has made it clear that such a fusion would require the expulsion of SACP members from the ANC and the dissolution of the ANC's alliance with COSATU. During the elections, Buthelezi campaigned against the influence of the SACP and said the trade unions have "too much power". He blamed the SACP and COSATU for the government's failure to fully implement GEAR.

Buthelezi turned down the deputy president position because it was conditional on the IFP allowing the ANC to take the premiership in the KwaZulu-Natal provincial government, Buthelezi's political power base. The IFP has been offered three national cabinet posts, including Buthelezi's home affairs portfolio.

In KwaZulu-Natal, the ANC agreed to join an IFP-led coalition government to rule the province. The provincial constitution will be amended to allow both parties to have equal numbers of ministers.

The value of the rand strengthened after the June 17 announcement that finance minister Trevor Manuel and trade and industry minister Alec Irwin (a leading SACP leader) — both architects of GEAR — would remain in their portfolios.

'Red hot' on privatisation

Mbeki's "state of the nation" address to a joint sitting of parliament in Cape Town on June 25 was clearly directed at boosting big business confidence. He restated that GEAR was the fundamental policy of the ANC.

Mbeki announced that a 20% stake in South African Airways had been sold to Swiss Air for R1.4 billion (US$230 million) and indicated that the pace of privatisation would increase. Up to 40% of the national carrier will be in private hands by the end of the year.

Jeff Radebe, the newly appointed public enterprises minister, will oversee the government's privatisation program, which is budgeted to raise R4 billion this year. Radebe, who is also a senior SACP member, said after Mbeki's speech that the SAA sell-off "indicates the government is very committed to accelerating the restructuring of state assets. We are not only hot, we are red hot on this issue".

Surprisingly, COSATU said it welcomed the sale of part of SAA while also saying it remains opposed to privatisation. SAA needed a "competitive edge", a spokesperson told state radio.

While denying that South Africa's labour laws are a hindrance to "labour flexibility", Mbeki stated in his speech that if business perceptions of the laws were negative, "they must be addressed". Laws relating to unfair dismissals and certain provisions of the Basic Conditions of Employment Act would be reviewed, he said.

On June 18, the new premier of Gauteng province, which includes the economically decisive Johannesburg-Pretoria region, Mbhazima [Sam] Shilowa, addressed a "business banquet" and pledged that his government would work hard to create a "business- and investor-friendly climate". Shilowa is the fiery former COSATU secretary general and a SACP central committee member. Shilowa's 11-member provincial cabinet contains seven members of the SACP.