Jacob Zuma, certain to be elected president by the new South Africa Assembly, is from the left of the African National Congress and has faced corruption and other serious charges. Yet his apparent wish to keep Trevor Manuel as finance minister suggests Zuma may understand how successful economies work.
South Africa has the potential to become a kleptocracy like Nigeria, a failed state like Zimbabwe or a richer Ghana – a successful free-market beacon of Africa’s potential. If he ends up serving two five-year terms, the maximum, Zuma will determine which direction is taken.
Theoretically, South Africa’s white minority should no longer have significant influence on politics; however, it has loads of money. That makes South Africa’s wealth distribution among the world’s most uneven, providing a strong temptation to elect an egalitarian populist, on a platform of wealth redistribution, as happens in similarly unequal Latin American societies. Indeed, it may just have done so; in style and rhetoric Zuma resembles Venezuela’s Hugo Chavez.
Yet one cannot imagine Chavez retaining a budget-balancing centrist as finance minister. Manuel, who balanced South Africa’s budget briefly in 2007, with public spending of only 28% of GDP and low debt, was ranked fourth on the ANC election list.
That suggests he will keep his job. Economic success should not depend on one man but Manuel, finance minister since 1996, reassures both foreign investors and the mostly white wealth-holders. Zuma’s willingness to allow Manuel to determine South Africa’s economic policies would thus send a crucial signal.
Manuel himself seems confident. “Our economy won't become ideological, it will stay rational," he said when interviewed recently. Of Zuma himself, he said “I know he is a man of great capacity, who loves to succeed and won't push himself and South Africa into failure.”
To enrich its poor, South Africa must retain a relatively un-corrupt and modestly sized government, reliable courts and stable property rights. It must also devote huge resources to education and infrastructure and generate large numbers of jobs through closer trade relations with the West, China and its poorer neighbours.
If Zuma moves in that direction, the Latin American parallel will become irrelevant.
