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.