Publication	Business Day
Date	2005-12-09
Reporter	Tim Cohen
Web Link	www.bday.co.za

If you wanted to write a headline for the year 2005 in SA, it would probably drift toward the novels of Communist-era eastern Europe. The year has had a Kafkaesque tinge to it; a trip into hyperreality where everything works backwards, where sense becomes nonsense and where reality and perceived reality blend. With apologies to Milan Kundera, it has been the year of the unbearable lightness of being South African.

The lead example is, of course, the Jacob Zuma saga, which makes you wonder whether any Hollywood scriptwriter could possibly dream up a script so bizarre. You can imagine the pitch, just as you could imagine a studio boss rejecting the idea as far too implausible, even for people primed to willingly suspend reality.

“OK imagine this,” says the budding scriptwriter. “The deputy president of an African country becomes embroiled in a corrupt arms deal involving a French company, but no-one believes he is really to blame because it is actually all a plot by his shadowy enemies in high places. But still he gets charged and consequently he is fired from his post, but instead of being roundly condemned, he just becomes more popular because the president, a classic dark lord, is thought to be pulling strings behind the scenes. Then just for good measure, he gets stuck with a rape charge.”

“Oh please!” says the studio boss. “Who is going to believe that?”

The case on its own would be enough to justify a “lightness of being South African” headline, but there are too many other examples that underscore the sheer weirdness of it all.

Another classic was Reserve Bank governor Tito Mboweni castigating the very labour legislation that he ushered into Parliament when he was labour minister.

This deserves a little recap. In 1995, Mboweni succumbed to some massive last-minute lobbying by the Congress of South African Trade Unions during the final readings in Parliament of the new Labour Relations Act and the Basic Conditions of Employment Act. The acts cut the working week to 45 hours, raised overtime pay, extended holidays and introduced a cumbersome system of dismissal procedures ­ basically a licence for lawyers to generate a raft of legal obstacles making it so expensive to overcome that firing anyone outright now is simply impractical.

Mboweni was repeatedly warned at the time that the legislation would sterilise the labour market and create a labour aristocracy. “This bill represents the triumph of politics over economic reality,” opposition leader Tony Leon said, for which he was roundly castigated. Well, Leon can have a wry chuckle to himself now.

Fast forward a decade later, and Mboweni effectively acknowledged the damage inflicted by the legislation. The “basic philosophy of the labour market reforms were valid”, he said, but to a large extent they had been undermined by lawyers, by the behaviour of the Commission for Conciliation, Mediation and Arbitration’s commissioners, by the behaviour of business and labour at bargaining councils, and to some extent by labour department bureaucrats.

“And I don’t know if (US Federal Reserve chairman) Alan Greenspan is correct, but he keeps saying that in an environment where you know that easier to fire also means easier to hire, the consequence is that you are going to hire. It seems to make sense to me,” Mboweni said.

And then, seemingly just to emphasise his change of heart, he said that he considered Maggie Thatcher and Ronald Reagan among his heroes. I am not making this up. “The current Labour Party government is benefiting actually from some of the policies implemented by Thatcher. We don’t like to say so, but it’s true.” The obvious truth of Mboweni’s comments were so frank, they were weird.

Although it was a year dominated by politics, there were plenty of examples in business this year of deep South African trips into virtual outer space. Like Finance Minister Trevor Manuel’s statement during his budget speech this year that a one percentage point decrease in business tax would “result in a revenue loss of R2bn”.

Actually, the revenue overrun from corporate tax alone for the 2005-06 fiscal year is now being estimated at around R20bn. Oops. Granted, economic growth has been exceptional this year, but it does demonstrate how centre-left governments typically misconceive corporate tax cuts as a loss to the fiscus when the stimulation of business is invariably a credit to the fiscus (not to mention the country).

On this topic, the wonderfully buoyant economy, a gold price above $500 and a platinum price above $1000, a stock market breaking records weekly, all contribute to the sense of unreality. I have heard it said that South Africans are so used to things going wrong, that when things go right, they just can’t believe it. Perhaps there is some truth in that.

So all in all, the first thing to do as the new year begins is pinch yourself. You are awake, you are not dreaming, it did happen. Now, in 2006, can we please come back down to earth?

• Cohen is editor at large.