PETER ATTARD MONTALTO: From water-use to energy, performative focus sidetracks from real issues

Posted in: Economics, i-Blog, Politics, South Africa on April 19, 2021


The list of distractions from what matters seems never-ending.

This column was first published in Business Day.

Everything seems rather performative at the moment — performative crisis-mongering, performative protest, performative vaccination schemes, performative witness appearances at the Zondo commission, performative policymaking, performative leadership.

The real action is maybe dull. Who cares about water-use licences? (Except the company trying to open a factory on time and employ more people.) Who cares about radical shifts in the domestic business environment being proposed by the government with workers on boards, enhanced localisation and employment equity requirements? (Except the companies trying to recovery from the pandemic.)

People seem to have forgotten we are in an energy crisis just because there is a short pause in load-shedding despite the dire warnings of what will come as the economy recovers. Equally there is something of a wool-over-the-eyes moment on the risk mitigation round as the department of mineral resources & energy seeks to provide “context” to the procurement round and see off its evident flaws — it will not be solving the energy threat through 2022 given the challenges to reach financial close.

The list of distractions from what matters seems never-ending.

Regarding the supposed “constitutional crisis”, a former president trash-talking judges and not complying with the Constitutional Court’s judgments isn’t a constitutional crisis. It will only become one if the constitutional, rules-based system cannot strike back and hold the line by inflicting an appropriate punishment. We wait to see on that front if such a punishment is given, (which is likely) and if it can be executed (about which most question marks arise but that seems quite possible).

There is similarly overexcitement about small protests outside Luthuli House comprising a bussed-in, ragtag bunch. The focus on the (admittedly important) issue of stand-aside is far too much “he said, she said” than actually what should happen, what was agreed or what will happen.

Quacking duck

Regarding the vaccination “trial” that couldn’t get above an average 8,200 vaccinations a day over any seven-day period, it seemed to mismatch the government’s spin. The private sector will now, hopefully, be allowed to show how it is done on a larger, faster scale.

In high drama at the Zondo commission last week there was an attempt to mislabel a quacking duck in a web of spin and obfuscation.

The most damaging element may be the performative policy-making, such as the distraction of the Expropriation Bill and section 25 amendments from what might actually make a difference to the country’s average emerging farmer, as the insightful Wandile Sihlobo outlined in this publication last week.

Sticking to IRP-2019 (Integrated Resource Plan 2019) when it is already out of date for the future demands of the energy system in the face of the forthcoming Climate Bill, the need for transition financing, and even least cost and jobs-maximising outcomes are also performative — playing the key vested interests.

Spin about policymaking remains problematic. Headline targets and national rhetoric on infrastructure ignores that most infrastructure (in volume/value) should be done at provincial and municipal level and that hard, complex policy moves are required to enable that.

Unions like performative compacting as we saw with the “Eskom compact”, achieves nothing that the government through leadership couldn’t attain on its own.

Long-term threats

The problem has been that any true analysis of the threats to the constitution, policy, growth and to political stability has been lost for the noise layered on top — an overfocus on Twitter and the sucking in of too much media time to cover performance rather than underlying issues.

The big long-term threats are energy security, fiscal sustainability and unemployment, driving inequality. These are regularly booted to the back of the agenda.

The distraction seems to have real-world effects though, especially in governance, driving risk aversion from the president particularly. A meaningful threat to ousting him in the short term would indeed need a lot of attention and focus. But does anyone seriously believe this will happen? Does anyone actually believe that imposing political capital and liberalising energy policy would lead to a lower probability that the president would win a second term at end-2022? Yet the focus on everything apart from what matters seems to reinforce this fear.

Leadership on an absolute basis — that all threats must be removed or placated — Cold War style, as opposed to looking at the balance of risks and probabilities — is the problem. Because for the risk averse there will always be another hazard — if you deal with step-aside now, what about branch and provincial meetings next year about a policy and elective conference? What about national elections in 2024 and a further elective conference in 2026? What about the fact the ANC always seems to realign itself during a leader’s second term?

Why is there never a debate about the fact that leadership and future chances for success could be strengthened through reform now — dealing with energy security, fiscal problems and unemployment? Would a liberalised energy system that created more jobs faster not lead to a higher chance of future electoral success? Would removing a minister here or there — such as at communications — that allowed reform not do the same?

All this affects companies at an individual and collective level. They have to do the fancy footwork in trying to sidestep these roadblocks that are put in place, to argue against the pieces of performative policymaking and to try redirecting the focus to evidence-based policy — after all so much of the performative action is evidence free. This is policy uncertainty in action and it has implications for sentiment and investments as well as job creation potential. There are enough ideas coming from business that need debate and attention.

Meanwhile unions’ views and stances on policy, not just their roles in performative politics, need interrogation. What is the future of a union in the Just Energy Transition? How do unions support workers through the fourth industrial revolution? Unions should be constructively challenged on these — not who they are supporting when, in what election.

The threat of the triple challenges that SA faces needs room for sensible discussion — whether it’s on the Just Energy Transition, monetary policy or necessity of a basic income grant, the funding of which should be challenged. These are the issues that will be the bigger movers of politics and electoral support in the long run.

For the rest, quacking ducks need to be labelled as such.

Attard Montalto is head of Capital Markets Research at Intellidex, an SA research-led consulting house.

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