Jacob Zuma’s kleptocracy that is now eating deep into the SA administration is a clear indication that the country’s day of reckoning with international rating agencies is fast approaching.
These were the words of Eurasia Group president Ian Bremmer and author of Time magazine’s list of the world’s top geopolitical risks, who visited South Africa in February on a fact-finding mission.
Ian Bremmer is an influential Wall Street advisor based in New York. He is a leading political scientist specializing in US foreign policy, states in transition and global political risk.
Placing South Africa in 10th place on the Times risk list- an alarming position to be in considering the various tensions rising around the world- Bremmer blamed President Jacob Zuma of ushering in a kleptocracy that’s now reached deep into his entire administration, barring the Treasury.
Kleptocracy is a system of government where corrupt rulers (kleptocrats) use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political power. Typically, this system involves the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service
Bremmer sent an email to investors, analysts and economists around the world telling them how he encountered one of the “most dysfunctional governments in the emerging market space right now”.
“President Jacob Zuma is an exceptionally savvy political tactician but functionally illiterate on economics. He’s ushered in a kleptocracy that’s now reached deep into his entire administration, barring the Treasury,” said Bremmer.
“That they’ve managed to forestall credit downgrades is surprising, but the day of reckoning is coming, especially as the political pressures around Zuma mount.” he added.
The political scientist, however, noted that the country could hopefully avoid the doom awaiting it if it chooses to take a U-turn back to its right political path.
According to him, the wheels of South Africa is yet to fall off as there’s a rich talent base in the country – only about 20% of South Africa’s whites left the country post-apartheid, and the elite labor pool is now reasonably well mixed between black and white.
Further in his mail, the expert said the country’s economy is no longer dominated by commodities, but instead has diversified towards infrastructure, services and information technology, all of which bodes well for a comparatively inexpensive and high quality-of-life destination.
Education remains poor and immigration is limited (mostly because of spotty execution on visas rather than the policies themselves), which limits the upside, but you already see South Africa, on Europe’s time zone, becoming a more attractive back office destination for European firms, he said.
“Africa’s rise is also good news for South Africa. As Africa itself continues to grow, the base for diversified firms continues to be South Africa,” said Bremmer.
“Especially because the larger African markets – Egypt and Nigeria – are otherwise unattractive as destinations for regional hubs.
“For increased consumption and infrastructure, Africa overall will still see moderate to high growth. Companies that plan on expanding investments accordingly will mostly situate themselves in South Africa.”
Ian Bremmer also pointed to deputy Cyril Ramaphosa as one leader he believes would be able to destroy the SA kleptocracy already drowning the major arms of administration.
He said there could be hope for SA if Ramaphosa is elected president during the 2019 elections. But, he said it seems he [Ramaphosa] doesn’t have enough votes within the African National Congress (ANC) to make his rise to the presidency a reality.
“There’s an eclectic but significant alliance forming around … Ramaphosa to take over the leadership of the … ANC party in December, with big business, the country’s trade unions, and the communists all hoping for an alternative to Zuma’s corruption.
Apparently, deputy president Cyril Ramaphosa has a very slim chance of winning an election within the ruling ANC following the party’s policy which gives no room for a deputy to climb the presidential seat.
President Zuma had earlier this year, publicly supported his ex-wife’s attempt to succeed him, saying that it was time the African National Congress elected a woman leader.