Privatisation is a major faultline running through the ANC

"A house divided against itself," as Abraham Lincoln famously quoted from St Matthew's gospel, "cannot stand." Although Finance Minister Trevor Manuel's 2003/2004 Budget is the first salvo in the 2004 election campaign, several other developments on the political front show not only division in the ranks of the ANC but the willingness to score own goals and even to trample their own wicket.

Manuel's Budget and economic health report presented last week is commendable and encouraging. At a time when major economies elsewhere are facing escalating deficits, minuscule growth prospects, higher taxes and unemployment, South Africa's prospects, for once, are the envy of others. Financial discipline and the basic tenets of the Gear policy have begun to bear fruit. Admittedly the harvest could have been richer had the Neanderthals and the Luddites in the ranks of the ANC's alliance not succeeded in hobbling the process. Admittedly, too, the dramatically improved collection of revenue by SARS has helped Manuel to prune personal income tax by R13,3 billion.

Aside from the corruption and nepotism that continues to blight the country and the squandering of taxpayers' money, the message which Manuel's Budget sends out is that he has a handle on things and that prospects are looking up. This is confirmed by the response to the announcement of foreign exchange amnesty last week. Business Report (March 5) states that R3 billion and possibly more is likely to be repatriated. Thus, whereas South Africa has suffered capital outflows, we now stand to benefit from changes in tax laws and poor investment returns abroad.

By accelerating the process of liberalisation, Manuel ought to be setting a virtuous cycle in motion, namely, improved foreign direct investment and an improved economic growth rate. But are the ANC's alliance partners on board? The listing of Telkom stock this week has exposed the strains amongst the comrades. Cosatu affiliate, the Communications Workers' Union, is opposed to the sale of any public assets and refuses to take up the Telkom share offer. Not to be outdone, ANC spokesman Smuts Ngonyama has stated that the ANC would lead demonstrations against the proposal to cut 10 000 jobs at Telkom.

Thus the faultline on privatisation which runs through the ANC is exposed: employment objectives must take priority over profit objectives; operational efficiency must take a back seat to the optimising of employment opportunities. It's Neanderthals and Luddites versus free market capitalism. It's an ideological spat that's been festering within the Tripartite Alliance since 1994. And it would seem that the Neanderthals have gained the upper hand.

In 2001/2002, a target of R18 billion was set for the sale of state assets. But less than R12 billion of that target was achieved thanks to delays and deferments brought about by the Cosatu/SACP crowd. Last year, a far more modest target was set - just R12 billion. To date only R1 billion of that has been raised; a further R9 billion is hoped for soon from the Telkom listing. From there, however, the projections flatten out. The 2003/2004 objective is only R5 billion dropping to just R3 billion for 2005/2006. While analysts have repeatedly slated the targets as being way too conservative, the latest targets amount to sheer tokenism and the cold-shouldering of foreign direct investment.

Clearly, it would seem, Manuel's hands are not on these levers. Such low privatisation priorities cannot be part of his vision. Fearing further job losses stemming from privatisation, the Neanderthals and the Luddites obviously prefer lower economic growth rates and a hamstrung economy as an election drawcard for 2004.

But whereas Manuel does well to project an acceptable economic image, his colleagues, Thabo Mbeki and Nkosazana Zuma, pull sharply in the opposite direction. Mbeki's role in the Non-Aligned Movement's (Nam) decision to endorse Robert Mugabe's tyranny and its call for the lifting of smart sanctions against Zimbabwe, is an outrage. By implication Nam and Mbeki are saying that democracy and human rights don't count; starvation and thug rule are fine. By tabling such resolutions, Nam makes itself irrelevant in the global village while Mbeki, whose own international image is bereft of credibility, dents and distorts the favourable image of South Africa which Manuel has presented.

In the same vein, the statement this week by Foreign Minister Nkosazana Zuma that the South African government will never condemn Mugabe's Zanu-PF regime beggars belief in terms of the reality of circumstances in Zimbabwe. Moreover, in future who will take the ANC seriously when they pledge themselves to human rights and to democracy in Africa? Likewise, the African Union and Nepad, with their emphasis on good governance and the "peer review" mechanism, is rendered useless, trashed by Mbeki and Nkosazana Zuma. Yet, ironically, it was Mbeki himself who last June stated that if Nepad fails, African leaders have only themselves to blame.

Completing the "house divided" spectacle was the division this week within the ANC over the fate of its disgraced former chief whip, Tony Yengeni. Although the perennially politically correct Speaker, Frene Ginwala, for once broke ranks and insisted that Yengeni be removed from Parliament, as usual delay and prevarication prevailed amongst her comrades. As usual it seemed the comradely thing to express solidarity with the corrupt and the convicted. The fact that Yengeni resolved the ANC's incapacity to act by actually resigning, however, does little to restore credit to Parliament or credibility to the ruling party.

Whatever the divisions in the ANC, fixing its image by 2004 is beyond even Saatchi and Saatchi.

With acknowledgements to Duncan du Bois and Natal Witness.