In capital we trust to fix beloved country

Trying to figure out what happens to SA may be our last remaining political distraction. There’s no point any more coming up with ideas or solutions. The government doesn’t listen and it is simply unable to conceive of a world in which it isn’t the “leader of society”.

Even old Soviet types are genuinely taken aback by the ANC’s inability to make policy for the modern age, and only now, as its energy, rail, health and education commands fall, is it looking to the private sector for help. But it is too late for the party.

President Cyril Ramaphosa came to power vowing to re-industrialise the country, and in the process “transform” it in terms of colour.

The ANC has never hidden its admiration for the way Afrikaner nationalists were able to build industries. It admires Hendrik van der Bijl, who started Eskom and Iscor and the Industrial Development Corporation as the tripod on which SA would rise as an industrial power, not merely a place of gold diggers and farmers.

The man chosen by Ramaphosa as his Van der Bijl, Ebrahim Patel, has utterly failed to make a difference. In effect, Patel, a doctrinaire trade unionist, has had dominion over industrial policy since Jacob Zuma made him economic development minister in 2009.

Now we are an industrial shadow of what we were when he took the reins nearly 14 years ago. The many big Western carmakers that produce vehicles in SA — easily our most sophisticated export business — are on the very edge of either departing or of redirecting new investment to other parts of Africa.

I mention this to return to the subject of my column here last week. A friend and I, I wrote, while failing to agree on what the true end of apartheid and colonialism would look like, at least agreed that we were a conservative and religious people and that the political centre was where votes were to be found.

A second friend, a European, suggested I not be so comfortable. While voters might be centrist, we as the ANC fragments are going to look a lot more like Italy (yes, I know, a fate devoutly to be wished for, but direct comparison was not what he meant).

While the Italians may also be conservative and religious, political power in Italy lies with fringe parties that are able to make or break coalitions at will and frequently do. We know what that feels like now.

Italy has had 69 governments since World War 2 ended in 1945, a new government every 1.3 years.

Dozens of small parties orbit around political power and the country has a history of deep political corruption. It is also a global industrial power, the world’s ninthlargest exporter and a member of the G7, the informal group of the world’s biggest industrial democracies.

“You will have three or four presidents a year,” said my friend in response to last week’s column. “Like the Johannesburg city council but at a national scale. Italians have learnt to live with that and they are doing OK. But the fringe parties have the power.”

There’s a sense I get from some big investors in SA that while this all looks very ugly, the ANC losing political control need not be scary. Italian companies thrive despite the political turmoil around them. Ramaphosa not being president doesn’t need to be scary.

It may be a moment where business simply does what it has to do to fix its routes to market.

People will do whatever they have to do to improve their lives, their security and their health.

Whatever it takes, in other words. People think the ANC will resist handing over power, or sharing it.

But it won’t. The ANC can barely pass the salt, let alone govern a defiant democracy by decree.

STOP MARKETS

The slow end of the ANC will trigger a dramatic reordering of the allocation of capital in SA such that it begins to work for growth again.

SA may be broken, but South Africans are not.

Already, private capital is available to fly SAA again. Private capital will save our energy system from collapse. Private capital will rescue our railways. The public purse may be empty, but even though the rand is collapsing and our relations with the buyer of our most valuable exports, the US, are deteriorating sharply, it is really hard to stop markets working.

I buy the sentiments of a piece the other day by Chris Becker, a smart young banker I follow. “The most important reason to be bullish [on] Southern Africa right now (though it’s not obvious’and is hard to understand), is that even the staunchest statists are realising that the state isn t going to fix this mess,” he wrote. “Even they are now seeing the only way forward is to build alternatives to be less dependent on the centralised state.

“But you don’t have to be as bearish as them, because this was always the bull case. This region will see tremendous growth once capital has been allocated into these alternatives … These are very important investments. Make them. More than needing cash investment, they just need men to roll up their sleeves and make some time to build these things with other men.”

Money will go to where it smells a return. The worse things become here, the more of a buying opportunity we may one day become.

THE ONLY WAY FORWARD IS TO BUILD ALTERNATIVES TO BE LESS DEPENDENT ON THE CENTRALISED STATE