It’s land now. Will it end with the death penalty?

It’s land now. Will it end with the death penalty?

The trouble with changing the Constitution is that it opens the Pandora’s Box of populism

Last week, South Africa endured a terrible, awful and simply bad few days. Problem is that our troubles are now arriving, to channel Shakespeare, ‘not as single spies but in battalions.’

Emerging market contagion was the start of it, currency depreciation exacerbated it and then the announcement that we are now in recession.  This is emblematic of what the economists call exogenous , or external factors, but plenty  of our economic misery was home grown.

But if September is gloomy, hang on to the safety strap for October. Next month finance minister Nhlanhla Nene  will deliver his medium term budget policy statement. Nene, is both honest and competent, but he is not a magician. He somehow, though, has to devise a statement which offers both a glimpse of funding of government’s populist giveaways, from national health, over-inflation pay rises for the millions of public servants to bail outs and guarantees for rotting state enterprises. But he also has to calm the nervous markets and the rating agencies. Somehow in the tide of red ink on the government balance sheet, he has to also signal that our sub-par growth can be boosted.

These signals will be studied with hawk-like attention by the last rating agency, Moody’s Investor Services, which on the back of last week’s recession announcement, slashed the country’s growth forecast in half (from a projected low of 1.5% to a floor-hitting bottom of 0.7%. More ominous than its low growth projection was its warning that our weakened economy is ‘credit negative’.

And hot-on –the-heels after Nene’s conjuring act in Parliament next month will be Moody’s rating review, of which its ‘negative’ signal means it will, as the last rating agency holdout, junk our investment grade. That in  turn will see an estimated R100bn or more of SA assets dumped by foreign bond holders.

Also last week, in a dress rehearsal of another forthcoming awful attraction, Parliament wrapped up its public hearings on amending the Constitution to weaken the provisions of section 25, the property clause.

Much energy, some theatrics and doubtless genuine grievances have been present during this process. However, one wonders whether it is not simply play acting. Not on the part of the presenters so much as the decision makers. After all, both the ANC and country president and ANC national chairman have already announced that needed or not, the constitution will be changed. Heedless of the contents of over 700 000 written submissions and a tower of babel of conflicting views proffered, the decision, if not its precise parameters appears to be set.

However, one of the last speakers heard by parliament on the issue, CEO of Nedbank Mike Brown, in a very measured statement, gave a glimpse of the financial apocalypse likely if wholesale expropriations become the new order of the much proclaimed ‘new dawn’.

He underlined that the deliberate vagueness around the exact formula for amending the clause, and how drastically it will alter rights of both existing and future property owners, and  every bond holder of land, of which his bank is a big player, has already affected investment sentiment. But if the train runs away from the station as it were, it could trigger a ‘classic banking crisis’. His bank alone (and there are three others with similar positions) holds R153bn on its residential mortgage book and R17bn exposure to agriculture.

But he also made an essential point about the theatrics involved in this process: “The Constitution already strikes a careful and well considered balance between the need to protect property ownership with the need to ensure land reform, while tackling the inequalities caused by our history…In our opinion the constitution has not been an obstacle  to land reform. “

The South African Human Rights Commission, entrusted by the framers of our constitution  as custodians of the rights under it, made precisely the same point in an earlier submission.

But I fear this is very much a dialogue of the deaf with a pre-determined outcome already in the offing.

Of course, Cyril Ramaphosa knows all this. After all, twenty two years ago, he was the person, as Chairman of the Constitutional Assembly, who struck and settled ‘the well-considered balance’ in section 25 which Mike Brown commends.

In those heady days of constitution making in 1994-1996, I was appointed by Parliament as one of the chairman of the Constitutional Assembly’s theme committee on Fundamental Rights. Then as now, public submissions, of which we received hundreds, weighed less than the back room negotiations between the parties, in which Ramaphosa was the central figure.

But while land was also back  then an emotive issue, the biggest single topic to which submissions referred was crime and the demand for the constitutionalisation of the death penalty. For reasons of history and to offer a new South Africa with a more enlightened face than the old, these entreaties were ignored. And the Constitutional Court had in June 1995 definitively outlawed it in S v Makwanyane.

But now that it is open season on the bill of rights and the protections it offers to both the best and worst of society, Inkatha Freedom Party announced on the weekend, according to eNCA, that it ‘wants a discussion on the death penalty.”

I very much doubt that public sentiment, far more pro-death penalty than pro-expropriations, has changed in two decades. Recent grizzly crimes and runaway gang violence has probably hardened sentiment in favour of restoring the death penalty.

But that is precisely what happens when you pre-emptively announce that instead of recognising the basic compact of 1996, the contents of the bill of rights is now up for grabs.

It’s going to be hard to row back on the waves of populism we have unleashed in our midst. Just pity the ailing economy in the process. It might get a great deal worse.

Leon, a former leader of the opposition, now chairs Resolve Communications and is a senior adviser to K2 Intelligence of London. @TonyLeonSA.

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By |2018-09-13T08:48:40+00:00September 13th, 2018|Cyril Ramaphosa, Finance, South African Politics|0 Comments

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