[Economics] South Africa’s Big Chance to Move Beyond Its Past

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Some South Africans are prone to saying that the country has a habit of rushing to the cliff’s edge, staring into the abyss and then stepping back. Avoiding a civil war and negotiating the end of Whites-only rule in 1994 was one such moment. This month’s unlikely alliance between the African National Congress and its most implacable critic, the Democratic Alliance, may be another. But with the party of Nelson Mandela having lost its majority for the first time in three decades, winning just over 40% of the vote from an electorate tired of corruption and failing services, the ANC of today’s president, Cyril Ramaphosa, arguably had little choice. Nevertheless, it was a difficult alliance to forge. The ANC won Black South Africans their freedom from apartheid while the DA is synonymous in some quarters with White privilege and the nation’s painful past. While it protests the label, the DA hasn’t been helping its argument given its current leadership—a White party leader and a White chairwoman of its leadership council—and its opposition to policies ranging from Black economic empowerment to universal health coverage for the poor. This week in the New Economy Polish policymaker eyes 2025 rate cuts, doesn’t exclude hikes. Kenya risks deficit target after bowing to anti-tax protests. China foreign direct investment falls for 12 straight months. Russian oil tankers sanctioned by the UK gather in Baltic Sea. Xi, Putin score wins as more Asia leaders aim to join BRICS. Unsurprisingly, the partnership between the ANC and the DA continues to face considerable opposition. By wrapping in several small parties with few demands, Ramaphosa has termed it a “Government of National Unity.” But in reality, it’s a coalition between two largely centrist parties that have been sworn enemies for decades.The magnitude of the ANC’s decline in po[CENSORED]rity means the only alternative would have been an alliance with one or both of its large populist rivals. That would have likely rolled back much of the progress democratic South Africa has made and potentially dealt a crippling blow to its already struggling economy. The Economic Freedom Fighters, which broke off from the ANC a decade ago, has spent years fighting off corruption allegations and seeks widespread nationalization of the economy. The uMkhonto weSizwe Party, launched in December by former ANC leader and South Africa President Jacob Zuma, wants to scrap the constitution. Ousted by the ANC in 2018 after nine-years of scandal-tainted rule, Zuma demands that Ramaphosa step down. The ANC-DA alliance may have stirred the ire of many in Ramaphosa’s party, but its policies could be a tonic for an economy that’s seen South Africans get poorer over the last 15 years. At least, that’s what the markets seem to think.

https://www.bloomberg.com/news/newsletters/2024-06-22/bloomberg-new-economy-south-africa-s-big-chance-to-move-beyond-its-past?srnd=economics-v2