PETER BRUCE: Zuma's contagion

Frederik Van Zyl Slabbert, one of the icons of the white liberal establishment before the fall of apartheid, used to say that "SA is too big to grab by the throat". Until now, I’ve believed that. But the fact is that President Jacob Zuma does have the country by the throat.

By sacking finance minister Pravin Gordhan and his deputy Mcebisi Jonas, Zuma has placed compliant leaders in the one department, national treasury, that has denied him unfettered access to public funds.

Obviously the new minister, Malusi Gigaba, is more sophisticated a politician than David Des van Rooyen, the nonentity Zuma tried to insert into the job in December 2015. But there’s a strange congruence to how Van Rooyen and Gigaba expressed themselves upon arrival.

Here’s Van Rooyen in 2015: "I want to make the treasury more accessible to all South Africans." And Gigaba, last Saturday: "[Treasury] policies, its management, its communications, must be accessible to all South Africans."

He was there, he said, to implement ANC policy, the central thrust of which is "to radically transform the SA economy, such that it works for all ... there need be no contradiction between inclusive growth and radical economic transformation". It’s a fair point. After all, inclusive growth in SA would be radical by definition.

After S&P hit Gigaba with a downgrade, though, his language changed. The phrase "inclusive growth" had survived treasury’s early responses to the debt downgrade. But there was no more mention of "radical economic transformation". The shock had been swiftly, brutally delivered. As cold, even, as Zuma’s sacking of Gordhan had been three days earlier.

Even in his more mellow post-downgrade response, Gigaba will battle to keep his word. First, inclusive growth is hard to achieve. It can only be the result of deep and detailed work, crafting a consensus about a new kind of capitalism. There is scope for this: our current model is more than a century old and ripe for reform.

But business will have to behave differently. It has to be encouraged to act in the longer term. So will labour and so will government. Each has to give something away, and in that process, Gigaba has to demonstrate an ability to finesse and compromise, cajole and encourage.

Unfortunately, none of those things is in his nature. He is imperious, impatient and inflexible — qualities that let him down at public enterprises and at home affairs. There were, at least, heartening signs of a more mature man at his press conference on Tuesday, but these are early days.

His second problem is how and why he was picked as finance minister. Zuma the politician is most usefully likened to the movie serpent that slides out of a jungle statue’s eye, tongue flickering, after our hero slips past. You know something bad is going to happen, you just don’t know what.

But we can learn. He’s not the only snake to have run a democracy. Donald Trump in the US is providing an abject lesson; Silvio Berlusconi, who ruled Italy for nine years, made Zuma seem saintly. How do some leaders get to behave so badly, cause so much misery and get away with it for so long?

In The New York Times recently, Luigi Zingales, an Italian and professor at the University of Chicago, was explaining to Americans what Trump will mean for them. He used Berlusconi in seeking to resolve this dilemma. "Berlusconi was able to govern Italy for as long as he did mostly thanks to the incompetence of his opposition," he wrote. "It was so rabidly obsessed with his personality that any substantive political debate disappeared; it focused only on personal attacks, the effect of which was to increase Berlusconi’s popularity.

"Only two men in Italy have won an electoral competition against Berlusconi; Romano Prodi and Matteo Renzi. Both treated Berlusconi as an ordinary opponent, They focused on the issues — not his character."

That would be tough for South Africans. The content of Zuma’s character consumes us. His treatment of Gordhan and Jonas the night he sacked them was despicable, but typical of the man. His political and private life has left a trail of wounded in its wake.

He epitomises the human, social, psychological and emotional damage that colonialism and apartheid did to too many South Africans. Now, he is Justice and he is powerful. The critics and opponents chasing him are too late. Zuma will survive this crisis.

Gigaba will also find a new Zuma now that he is in treasury. No matter how sincere he may be when he talks about "inclusive growth" or "fiscal discipline", the fact is that in SA, the finance minister is not in charge of the economy. He is its banker, not its CEO. The ministers of trade & industry and economic development make policy. It is their fault that SA’s growth is so anaemic.

Gigaba will find himself throwing money, in the name of "accessibility", at all kinds of stupid ideas, simply because the department of water affairs wants a R14bn dam near Tsolo, or trade & industry needs to get 100 black industrialists by October — none with a unique product or market. Zuma insists.

Nor will Gigaba be able to resist the relentless pressure from Zuma to serve his paymasters, the Guptas. The Guptas are a special kind of family business and not necessarily criminal either. What they do is use public funds to start businesses. Their simple idea was to capture Zuma, which proved remarkably easy, and then get him to get his ministers to help them grow their businesses here. So, for example, Eskom financed their purchase of a coal mine, the Industrial Development Corp funded their purchase of the Shiva uranium mine. But the Guptas have only just begun.

Inside national treasury sits the Public Investment Corp (PIC) which invests almost R2trillion worth of civil service pension funds. If Zuma is able to allow the Guptas access to that, his job is done. He’s home free, anywhere in the world.

A common misunderstanding is that Gigaba’s deputy, Sfiso Buthelezi, now automatically becomes chairman of the PIC and would be the actual facilitator of crony raids on its money. That is not the case. The minister, Gigaba, appoints the PIC chairman and it doesn’t have to be Buthelezi.

It’s hard to know what the Guptas might want from the PIC, though they already claim they should own Independent Newspapers, which the PIC had initially steered the way of Iqbal Survé. Maybe they’ll get what’s left of Independent now. But the PIC is the biggest investor on the JSE and it is in a position to facilitate just about anything — even a seat on the board of, say, a large local bank for Atul Gupta. That’s "access".

The tragedy of Gigaba is that Zuma contaminates everything he touches. The new finance minister is a young man — unlikely to be as rich as his detractors claim. And he cannot be sure he will have a political future beyond 2019. The conventional way to do this is to act with all the resolve he can muster in the cause of his party and his boss. But he also has a wider duty to act with integrity, to tell no lies, to live within his means.

Gigaba will not be 50 when Zuma is bundled out of office and he still has a chance to be his own man. I hope he finds a way to reclaim his early promise. Breaking SA out of a debt crisis is way beyond his experience and, possibly, his capacities. But we will soon see what he is made of.

(Fitch downgraded South Africa to BB+ on Friday afternoon.)

Gigaba was the minister who formally kicked off the Gupta state capture project when he, at a cabinet meeting in June 2011, announced he was sacking the boards of Transnet, Eskom, Denel and other state-owned companies.

Many of the people he replaced them with were Gupta proxies, who went on to enable the family to do enormous amounts of business with the state. I have never believed he acted alone. I believe a list of names was drawn up by the Guptas and handed to Zuma who, in turn, handed it to his (then) rookie public enterprises minister, Gigaba, to implement.

But there’s a potential silver lining. It is that Gigaba is arguably stronger now, in his new job, than he will ever be. Zuma can’t fire him. Will he be left to do his job? There is only one way to find out and it’s best done sooner than later. He should recruit a person of unimpeachable integrity to be chairman of the PIC board, and not simply give it to the deputy Zuma gave to him. It is within his power to do that.

The Guptas would rush screaming to Zuma, but with one act of defiance, an act of great political courage, Gigaba would be free and could begin to turn this economic nightmare around. He probably won’t, but he’ll live to regret not trying.