Dale Williams
Dale Williams

Manuel: I could close my eyes now …

Imagine sitting in a room in 1991 with a group of South African’s trying to map out what the nation would look like in 2002. At the time we were in the middle of negotiations, the country was racked in violence and uncertainty, we were yet to have our first democratic elections and predicting the future was a risky business.

Nelson Mandela had been released from prison in 1990 promising widespread nationalisation which was the ANC economic policy at the time, and the Anglo Scenarios popularised by Clem Sunter were veering towards the Low Road.

At the time, Pieter le Roux of UWC was offered money from German foundation Friedrich Ebert Stiftung to organise a conference on the future of South Africa. Sceptical about the conferences that had been held to that point, where delegates reiterated their stated positions, Le Roux decided to follow a different approach and run a scenario-planning exercise.

Meeting outside Cape Town at the Mont Fleur Conference Centre, Le Roux gathered participants from all major groupings of political, business, academic and social organisations*. He chose them based on who they represented but importantly asked them to participate on a personal rather than organisational basis, allowing them the freedom to explore all points of view rather than toeing a particular “party” line.

That group of people today looks like the who’s who of South Africa and includes Tito Mboweni, Trevor Manuel, Christo Wiese, Vincent Maphai and Saki Macozoma (for a full list of participants — see below).

The scenario-planning exercise was facilitated by Adam Kahane who had cut his teeth on scenario planning at Shell, one of the world leaders in the process. The group met in September 1991 followed by a period of research until their second meeting in November that year. There they assessed their progress and developed four scenarios. They then started a period of consultation until March 1992 where they finalised their work and started the process of dissemination.

One of the groups that Mont Fleur participants presented to and consulted with were select cabinet ministers. Nick Segal, who has researched all major scenario-planning exercises in South Africa, reports that “after the presentation, Derek Keys** casually mentioned that he happened to have in his car slides of a presentation he had recently made to Cabinet on the state of the economy and asked whether the team might have any interest in seeing them”.

This presentation was very influential as the group realised that South Africa wasn’t the rich country that they had believed but was rather in a dire economic situation predominantly as a result of sanctions and a very expensive war with the frontline states.

Segal goes on to say: “In mid-September 1992, only a few weeks after this episode and at a time when political negotiations had broken down, a wide-ranging interview with Mandela was published in Johannesburg’s leading daily newspaper The Star. Mandela made the following comments on the economy: ‘We want to break the deadlock (in the negotiations), because if we don’t, I fear that the economy is going to be so destroyed that when a democratic government comes into power, it will no longer be able to solve it. The longer it takes for democracy to be introduced, the more difficult it will be to repair the economy.’ ” Mandela’s position was changed as a result of a meeting the previous week with Manuel where they had discussed Key’s presentation on the economy.

The ANC’s economic policy was changing.

The four scenarios developed covered South Africa for the period 1992 to 2002 describing possible futures and how they would have an impact on the social, economic and political agenda. The idea was not to develop definitive truths but to stimulate debate on these topics.

The four scenarios described in the final Mont Fleur document are:

  • Ostrich, in which a negotiated settlement to the crisis in South Africa is not achieved and the country’s government continues to be non-representative.
  • Lame Duck, in which a settlement is achieved but the transition to a new dispensation is slow and indecisive.
  • Icarus, in which transition is rapid but the new government unwisely pursues unsustainable, populist economic policies.
  • Flight of the Flamingos, in which the government’s policies are sustainable and the country takes a path of inclusive growth and democracy.

Speaking about Keys’ presentation Manuel says “Derek sat around and chatted with us, and it was very important, because we were trying to understand the Icarus scenario and the dangers of macro-economic populism. That was certainly profound for me”. It was the start of a friendship and mentoring relationship across the political divide that Manuel and others admit was important in preparing the young team for the task that lay ahead. (From Alister Sparks’ book Beyond the Miracle)

Last year I invited Maphai (currently SAB executive director for corporate affairs and at the time chairman of BHP Billiton) to speak to our strategy students at UCT. Not wanting to miss the opportunity I asked him how much Mont Fleur had affected ANC economic thinking. He confirmed that the scenario exercise had had a profound affect on the participants who later went on to hold very influential positions in South Africa post 1994.

Mboweni, who became Reserve Bank Governor in 1999 stated in his inauguration address “we are not Icarus; there is no need to fear that we will fly too close to the sun”.

In his book, Solving Tough Problems, the facilitator of Mont Fleur, Kahane, quotes Manuel saying: “It’s not a straight line [from Mont Fleur to GEAR]. It meanders through, but there is a fair amount in all that going back to Mont Fleur … I could close my eyes now and give you those scenarios like this. I’ve internalised them and if you have internalised something then you probably carry it with you for life.”

With Manuel’s success as finance minister, following very similar policies to those outlined by the Flight of Flamingos Scenario, the question is whether he will now, in the possibly more powerful position as head of the National Planning Commission, be able to influence ANC policy sufficiently to keep the organisation on the right side of the balance between sound economic policy and macro-economic populism.

That the ANC is bigger than its individuals was demonstrated in the recalling of Thabo Mbeki last year. It is unlikely that Manuel was simply a renegade finance minister who managed a policy which wasn’t in line with broader ANC thinking.

Jacob Zuma’s resistance thus far to give into the labour movements’ calls for more populist policies, bodes well for a theory that it wasn’t Manuel alone that set the course of economic policy over the past years but that it was a widely accepted ANC approach.

ANC thinking is clearly aligned with that of Mboweni, Mbeki and Manuel and while South Africa has yet to demonstrate that sound economic policy rather than macro-economic populism delivers to the poor and not only the rich, a break with this thinking would lead us down a hole from which it will be difficult to recover.

* With the notable exception of the Inkatha Freedom Party

** Derek Keys — former Gencor executive chairman, brought into the cabinet by FW de Klerk as minister of economic affairs in January of 1992 later taking over the finance portfolio and becoming finance minister from 1992 to September 1994.

Full list of Mont Fleur participants:

  • Dorothy Boesak
  • Rob Davies
  • Howard Gabriels
  • Adam Kahane
  • Koosum Kalyan
  • Michiel le Roux
  • Pieter le Roux
  • Johann Liebenberg
  • Saki Macozoma
  • Tito Mboweni
  • Gaby Magomola
  • Mosebyane Malatsi
  • Thobeka Cikizwa Mangwana
  • Trevor Manuel
  • Vincent Thabane Maphai
  • Philip Mohr
  • Nicky Morgan
  • Patrick Ncube
  • Gugile Nkwinti
  • Brian O’Connell
  • Mahlomola Skosana
  • Viviene Taylor
  • Sue van der Merwe
  • Dr Winfried Veit
  • Christo Wiese
  • Sarah Henkeman

    These scenarios clearly led to a paradigm shift in the ANC’s thinking. It seems to me that most scenarios are compiled by those who are already converted to a particular perspective. The perspective that is lacking in all these scenarios, is the direct perspective of the average South Africa.

    Fear induces a kneejerk reaction and does not give a broad spectrum of perspectives on ‘what ifs’, unintended consequences, spillover effects.

    Are you suggesting – without stating it – that this is the best we could do and therefore the current levels of violence were anticipated? The truth is, in the final analysis, these scenarios ended us up with a few filthy rich individuals and the majority having to live with the consequences of lingering structual injustice evidenced by inequality.

    Surely there must have been a middle road between macro economic populism and what we have now? Frankly, the fact that we are becoming more militarised is a consequence of limited thinking (induced by fear)during scenario planning.

  • Muhweleli

    Interesting articel Dale
    So, in short you’re saying the messages that come from some of the ANC leadership
    (particulary the alliance partners) do not represent broader ANC thinking.

  • John Collings

    Your observation that “South Africa has yet to demonstrate that sound economic policy rather than macro-economic populism delivers to the poor and not only the rich” puts ALL the onus of improving the lives of the poor on economic policy, whatever that policy might be. While CREATING jobs is important – and economic policy is far from being the only factor in being able to achieve that – having the skills and good health to PERFORM those jobs well is no less so. No need to dilate yet again on the failings, from 1994 to the present, of the health and education ministries and departments, to say nothing of housing and land affairs, in fingering the culprits, nor on corruption and other factors that have prevented our achieving a reasonable level of efficiency just about anywhere you care to look in the public sector.

  • craig

    Pity nobody invited Siphiwo Siphiwo …

  • Sarah Henkeman

    contd

    It was Naom Chomsky who said ‘…consensus values are seldom questioned’. Some say that Chomsky should stick to linguistics and I guess they would also argue that those who know nothing about economics should simply close their eyes to the consequences of the ‘best alternative’ imagined by the partial perspectives of those who ‘know better’.

    Just 3 questions from someone who does not know better: (i)is there a correlation between growing inequality and (criminal)violence? (ii)Is militarisation and strengthening of the Criminal Justice System an admission that the best solution cannot can only be sustained by forcefully containing those who will inevitably fall short of its requirements and rebel against it? (i) What is the central logic of these scenarios?

  • brent

    The Apartheid Govt. gave the next one a virtually bankrupt economy which the Mandela Govt. built up with sound economic policies and thus assisting the growth by the private sector.

    That the poor did not benefit much was because of the wasted arms deal and lack of delivery at all three levels of Govt – ie +- R30 billion for arms plus at least double that over +- 12-15 years of non delivery/un-spent money which gives over R60-90 billion that could have benifited the poor and jobless.

    Surely wisdom says spend wisely/broadly on education/training/health/infrastructure/land re-distribution etc the money that prudent Govt. policy and a free market have built the past 10 years before embarking on an untried spending spree to satisfy powerful interest groups to ensure voter support.

    Brent

  • http://kwerekwere.blogspot.com mundundu

    pieter le roux’s brother is one of the founders of capitec bank. i guess they figured that if the government isn’t going to serve the poor, they would figure out a way to serve them themselves.

    [here’s my shameless plug for capitec: if you’re not moving money in and out of the country, there’s no reason shouldn’t have them as your primary bank. seriously. you get a much better deal than from the big four.]

    i’ve had classes with prof. even when the subject wasn’t on this very topic, these meetings came into the discussion.

    a global downturn is a very good time to put populist policies in practice. while they can be inflationary, populist measures such as make-work infrastructure spend actually can be a good thing, as it would put framework into place for when the economy recovers.

    there’s a reason that all the cool kids are doing it now. like a broken analog clock, cosatu and the sacp can be right twice a day. [the other thing they’re right about is the whole interest rate thing, and for the same reason. mind you — they’ve only been right for the last 18 months or so.]

  • Benzol

    In the days that these eminent persons sat around the table, the Millennium Development Goals for 2015 were already under discussion.
    Some key points were:
    1. reduce poverty (by decent income for decent work) while the increased automation and computerisation was reducing opportunities for decent work.
    2. reducing death of babies, mothers at birth and HIV/Aids. The majority of those targeted were the poor, so increasing the numbers of poor people worldwide.

    Without getting emotional about human suffering (believe me, I do care!), the targets of the MDG were a “contradictio in terminis”.

    Today, 5 years before the MDG targets were to be achieved, the world has not moved forward one inch if not moved backwards. A slow realisation begins to emerge (and confessed) that the MDG targets will not be reached in 2015.

    I could suggest that the MDG targets were developed and defined by a much more eminent and learned group of people than the SA eminentia at the time. Their laudable targets seem to undergo a similar fate as the MDG targets.

    What is the lesson to be learned?
    1. reduce the number of people on earth? How?
    2. reduce pollution of the earth? How?
    3. create more work for people? How?

    The proper answers to the “How?” will not get one a seat in Parliament.
    Hence politicians, as we know them, are not the people who can provide the answers.
    Businesses, with their growth targets into infinitum, cannot contribute to the solution either.

  • http://www.intelleguntdesigns.org Pastor Ray Mac Oily

    A Physics Lesson in Counter Weights for Trevor Manual —- ‘H’ for Senior Certificate score for Mathematics, Technicon Drop Out and former UDF rabble rouser.

    In theory ( ideal ) a counterweight means that a system has NO net forces due to gravity and is balanced with no tendancy to move even tho’ free to do so.
    This means a separate force applied does not have to do gravitational work ( lifting ) but only against friction . So for example if I suspend two 1 ton weights over a rope and pulley , which are balanced, then to move them does not require me to lift 1 or 2 tons . They still have inertia ( and resist moving ) but not due to weight , and if there is little friction then any applied force would move them but slowly if the force applied was small.
    in many cases a counter weight is used to reduce stresses in the frame
    —————————-
    A Lesson in Politics or History for Trevor Manual — Cape Town Technicon Drop Out

    (1) The history of all hitherto existing society is the history of class struggles. (Karl Marx)
    (2)Who controls the past controls the future: who controls the present controls the past. (George Orwell)
    (3)History: An account, mostly false, of events, mostly unimportant, which are brought about by rulers, mostly knaves, and soldiers, mostly fools. (Ambrose Bierce)

  • Jon

    Chomsky SHOULD stick to linguistics.

  • Lyndall Beddy

    So now we know who to blame for the “trickle down” theory.

    IDIOTS!

    None of them saw JOB CREATION as first priority?

    And if these guys were what influenced Mandela – how did De Klerk know, before Mandela knew himself, that Mandela (30 years out of touch) was going to change his mind?

    Perhaps because De Klerk realised Mandela was not suicidal.

  • Alisdair Budd

    For your info:

    The BBC put together an archive of bits about Apartheid to celebrate the 50th anniversary of the formation of the Anti-Apartheid Movement.

    http://www.bbc.co.uk/archive/apartheid/index.shtml

    Perhaps you’d like to rummage through it, on the basis that those who dont learn from their history are doomed to repeat it.

    (The archive is a bit eclectic, but wide ranging and has some unusually rare bits you dont often seen, like Macmilllian’s “Winds of Change” speech to the SA parliament in 1960.)

  • SouthEaster

    Interesting to read about this in the context of what has happened since. Have we got a duck or a coule of flamingos? Didn’t look like they factored in institutional corruption.

    Made me realise the extent to which I used, unconsciously, some sort of scenario planning to decide whether or not to stay in South Africa. It wasn’t just a case of saying ‘SA’s stuffed, let’s go’. It was a case of considering, in the light of the past decade, how well SA is likely to face a variety of issues in the next two, and estimating the risks vs the rewards for our family.

    I’m sure most people who have considered leaving do something like this. It’s a lot more complex than Pessimists vs Pollyannas.

  • Felas

    What sound economic policies? Fiscal prudence meant that we did not spend on all forms of infrastructure-this is why we have crisis in roads, rail, energy and other infrastructure.It meant that we did not spend on social infrastructure-health and education(human capital. Instead of focusing on creating jobs we used taxes gained from the growing non-job creating industries to get more people on social security.

  • Oldfox

    Benzol, mundundu,

    If you really want to know the answers to some of the really tough challenges facing the world, I recommend you read: Common Wealth. Economics for a crowded planet. By Jeffrey Sachs. R146 at Exclusive Books (I bought my copy in the international section of OR Tambo).

    Infinitely more useful than my previous faourite books, by Easterly and Joseph Stiglitz.