The new Randlords

South Africa is booming. The economy is enjoying its biggest surge since the Second World War - and

United States of America Boulevard: there was a time when no self-respecting black-township resident would have wanted an address so redolent of US imperialism. Just a decade or so ago, Fidel Castro and Che Guevara were township street names of choice. One might have thought that Hugo Chávez would now be keeping South African sign-makers busy. No chance, or at least not in Cosmo City, a flashy new housing estate on the outskirts of Johannesburg. Here the US of A Boulevard is among the most sought-after addresses - as is Las Vegas Crescent - because it is here that members of the new, black middle class are flocking in droves, in search of mock-Tuscan villas and a share of the consumerist new South African dream.

When Nelson Mandela was released from prison in 1990, his first speech brimmed with vintage redistribution rhetoric. To be fair on the "old man", it had been forced upon him by anti-apartheid radicals, who feared he had gone soft behind bars, but not surprisingly the markets dived. Since then, however - indeed, since the very next morning - the economic policies of the African National Congress have moved to the right. Now, as South Africa celebrates the anniversary of Mandela's inauguration on 10 May, bigwigs in the ruling party are embracing capitalism with such relish that President Thabo Mbeki, the very man who unleashed this capitalist fervour, is expressing unease over some of his old comrades' pursuit of bling, and the long-quiescent unions are muttering that it is time to take "back" the party.

"This is banker heaven," one American banking executive told me recently, shortly after my return after nearly a decade away. He did not need to explain. All around us in a trendy Johannesburg mall were members of the "Black Economic Empowerment" (BEE) crowd, many no doubt celebrating deals to secure equity from historically white-run firms, a key part of the government's policy to level the economic playing field. I found the scene all the more riveting given that I had last visited that mall in 1993 when, as a newly arrived foreign correspondent come to cover the bloodbath threatening the transfer of power, I had been the only customer in an Italian restaurant. The proprietor was convinced that South Africa was heading for the abyss, and sold up. How wrong she was (on both counts).

Buoyed by the surge in global commodities prices, and steered by Mbeki's prudent fiscal policies, South Africa's econ omy is enjoying its most concerted spurt since the Second World War and Johannesburg is booming. For the past two years the economy has grown at about 5 per cent. This is not as high as it needs to be if unemployment is to come down, but to have ventured such a prediction at the start of my first stint would have led to widespread rolling of eyes. Yet now, consumer confidence is at a 25-year high; the Johannesburg Stock Exchange's top 40 index has gone up nearly 250 per cent in the past three years; house prices are up more than 125 per cent since 2003; new car sales soared by nearly 16 per cent to an astonishing 714,000 last year.

And for once in South Africa's history, it is not just white people who are prospering. Leaf through the pages of City Press, a Sunday newspaper aimed squarely at black South Africans. I remember it for its doughty political coverage, but not much else. Now it has a glitzy motoring section. "Two BMW 3-Series for the price of one", ran a typical headline two weeks ago. Beneath it was a story headlined: "Mercedes-Benz B200 pricey but quite nice". According to figures quoted by the business magazine Finance Week, the number of "super-rich" (those earning more than four million rand - £285,000 - a year) has risen by 50 per cent in the past five years. While blacks, Asians and people of mixed race accounted for less than 25 per cent of this category in 2001, they now account for 34 per cent; that figure is expected to rise to over 40 per cent by 2011.

So what happened to the idealism of the ANC cadres I knew back in the early Nineties? The cynical or simple answer is that many have been seduced by easy money. The Johannesburg of 2007 reminds me as much of Vladimir Putin's Moscow - a boom in construction and car sales and a flowering of oligarchs - as of the unhappy Joburg I knew in the early 1990s.

"We [black South Africans] must have business role models," says one of the better-known members of the ANC billionaire elite, who has had dozens of directorships handed to him on a plate primarily because of his "struggle" credentials. "Are you denying us the right to make money?" says another. They have a point. It is hypocritical for western commen tators to argue, as they often have, that the governments of newly independent African states have no idea how to run an economy - and then condemn their supporters when they prove rather canny capitalists.

But the arguments of the new black "Randlords" are a little lame. Their talk of having been "deployed" into business may be true, but it is also a convenient euphemism for the acquisition of serious money.

Overtaken by greed

The simpler truth is that many "struggle" veterans have appreciated that after years of fighting the good fight they do not need to stay poor. What is more, it is rather easy to become rich, given the desperation of white businesses to prove their commitment to the new era by finding a black partner, and, in many cases, any old black partner.

The rise and fall of the "Queen of BEE", South Africa's most prominent black businesswoman, who had to resign in disgrace recently from more than a dozen boards because of a huge conflict of interest, was a reminder of the perils of the new culture. Mbeki himself has taken to bemoaning the "money, money, money" way. Last year he used the annual Nelson Mandela Lecture to castigate those for whom "success and fulfilment means personal enrichment at all costs and the most theatrical and striking public display of that wealth".

The good news, however, for those who fret from afar that its new elite have been overtaken by greed, is that there is more to South Africa's revolution than just conspicuous consumption. Day by day the country is becoming more "normal".

Society remains, of course, in many ways unthinkingly racist. How is it that so many whites still talk of their gardeners as "garden boys" when they are referring to adult men? Yet, despite Mbeki's Africanist insistence, aired in his weekly online columns, and repeated to me in person, that racism still poisons society, my impression is that race relations have improved vastly. It is far rarer now, as a white man, to be met with the pre-emptive cringe that used to be the hallmark of so many interracial encounters. I remember, soon after my arrival in 1993, hearing of the experience of a black American colleague. She was queuing in Thrupps, the Fortnum & Mason of Johannesburg, and a white woman looked over her shoulder at the French cheeses in her basket and said: "Oh, what good taste your madam has." "I am the madam," my friend replied. That encounter is impossible to imagine now.

The country is also no longer so out of date. In the Nineties many whites, and not just Pretoria civil servants with their beehive hairdos and floral print dresses, or their shapeless suits and grey shoes, dressed as if in a Fifties sitcom. Black South Africans were by and large no more contemporary: township style was a scruffy T-shirt and jeans. I remember Dali Tambo, the designer and chat-show-host son of the late ANC leader, shaking his head in despair over South Africans' dress sense. Since then there has been a collective make-over. Go to one of the half-dozen malls that have opened in Soweto in the past year or so. They are little different from the malls in Johannesburg's suburbs - or, indeed, the rest of the world.

What's getting worse?

So where is the catch? My second morning back, I was reflecting on my impressions of the "new normal" when I met up with a former senior government official and ANC stalwart. What should I keep my eyes on, apart from the boom, I asked? "Corruption, incompetence, unemployment and crime," he said. "They are all getting worse."

South Africa has between 20 and 40 per cent unemployment. Trevor Manuel, the well-regarded finance minister, who has just overseen South Africa's first budget surplus in recorded history, concedes that this keeps him awake at night. After dithering, the ANC is rolling out vast infrastructure projects, in particular for the 2010 World Cup. But 5 per cent growth will not make inroads into unemployment.

Manuel shrugs off the charge that he could have been bolder in seeking higher growth. Speaking to me before he delivered his budget speech, he also rejected the idea that a surplus was an "embarrassment of riches". Rather, he suggests it is an insurance policy against harder times. But he is also the first to rail against the incompetence of swaths of the government which are unable to spend his bumper revenues. He bemoans the lack of a skilled workforce, and concedes that credit levels are dangerously high, because South Africans, particularly members of the black middle class, borrow to the hilt.

"The situation reminds me of Bolivia or Peru," says one businessman. This is not, as you might think, the caustic one-liner of a disillusioned "whitey". Rather, it is the view of Moeletsi Mbeki, the president's younger brother, one of the government's more trenchant critics. In particular he is appalled by the Black Economic Empowerment policy. It is, he says, just a cosy arrangement between white business and the black elite that will return to haunt South Africa.

There are many places in South Africa where the Bolivia/ Peru analogy rings all too true. There is not much bling in Boikhutso, a down-at-heel township in the old Western Transvaal. The main road is at last tarred and more houses have electricity than in the old days. But life is still grim, with unemployment over 50 per cent. It is places like this that spew out the young men who feed the crime wave, possibly the main disincentive to investors as they choose between South Africa and other developing markets.

Crime was appalling ten years ago when I left after my first stint. Now, anecdotally at least, it is just as bad. Take the 24 hours before I wrote this article: the family of a prominent regional politician was held up by a gang at gunpoint at the family house in northern Joburg; millions of rand were stolen in a raid on a military base in Pretoria; a Capetonian I met had been bound with his family and frogmarched through a wood by gun-wielding thugs, expecting to be killed.

The greatest threat to Mbeki's legacy is not crime, however, but a backlash against bling. This is the tussle that will come to a head in December at the ANC's five-yearly conference, when radicals have vowed to take on the centrists, including Thabo Mbeki. I accompanied him recently to Soweto on one of his rare township tours. Bridget Ngeleza, an unemployed secretary, watched his progress from the garden of her shoebox bungalow. She was far from starry-eyed, but thought his embrace of capitalism was right.

"He wants people to help themselves," she said. "He doesn't like to spoon-feed people." My guess is that she reflects the bedrock of the party. It may be ugly, but the era of bling has some years to run yet.

Alec Russell is the southern Africa correspondent of the Financial Times

South Africa’s wealth by numbers

16% increase in number of dollar millionaires in 2005

$11,000 average annual income, compared to $1,750 for the rest of sub-Saharan Africa

25% rise in demand for credit in 2006

3 number of South African billionaires on Forbes's 2007 Rich List

55 number of BMW dealerships in the country (plus one Rolls-Royce and two Porsche showrooms)

Research by Shabeeh Abbas and Jonathan Pearson

This article first appeared in the 07 May 2007 issue of the New Statesman, Blair: The reckoning

Edel Rodriguez for New Statesman
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Rehearsing for war

From the Middle East to North Korea, Donald Trump is reasserting US military strength and intensifying the rivalry among the great powers.

As Vice-President Mike Pence arrived in South Korea from Washington on Sunday, he announced that the “era of strategic patience”, in which the US sought to monitor and manage the nuclear threat from North Korea without pushing the matter for fear of escalation, was over. “President Trump has made it clear that the patience of the United States and our allies in this region has run out and we want to see change,” Pence declared. The heat under a crisis that had already been bubbling ominously was turned up another notch.

Much has been written in recent years about the stability provided by the post-1945 world order and the dangers of letting it crumble. The conflict in Korea provided the first big test of that order almost 70 years ago, but the difficulty was never really resolved. It remains the proverbial “wicked problem” in international affairs, “frozen” in an obsessively monitored and deeply uneasy stalemate, demarcated by the Demilitarised Zone: a line 160 miles long and roughly two and a half miles wide scored across the middle of the Korean Peninsula, drawn with superpower supervision in 1953. Partition has allowed a strong and ­successful state to flourish in the South while the North has survived in a state of ­arrested development.

The problem has been passed down from generation to generation because attempting to solve the issue risked opening a Pandora’s box. The risks included the unleashing of huge military force, potential world war and a refugee crisis on a scale that could severely destabilise even China. By the 1990s, it was clear that the North Korean regime had fastened upon another strategy for survival as the Cold War passed into history and its sponsors in Beijing and Moscow began to question the value of such an ally: the acquisition of nuclear warheads. Pyongyang has long had the firepower to flatten Seoul in a matter of hours. The mission since has been to develop its missile technology to carry that material as far as possible – certainly to Japan, but ideally also to the west coast of the United States.

The day after Pence’s announcement, the US and South Korea undertook a joint air and army exercise to ensure readiness in the event of an attack from the North. This followed a joint naval war game earlier in the week and the US decision to send a navy group led by the nuclear-powered aircraft carrier USS Carl Vinson, which Donald Trump described as an “armada”, to the region. No sooner had the fleet appeared than Japanese sources reported that it had been followed by Chinese and Russian submarines as it entered North Korean waters. Such are the great-power manoeuvres of the 21st century – whether on air, sea or land – in which the world’s most potent military machines shadow the moves of their competitors, and openly rehearse for war.

***

Asia has not had a major inter-state war since the 1970s but it is not immune from the tragedies of power politics that have beset other rapidly developing parts of the world. Across the region, military spending is rising fast as states jostle in anticipation of a changing balance of power.

The purpose of Pence’s Asia-Pacific tour is to offer reassurance to America’s allies in the region, which have been watching the rise of China, in particular, with trepidation. The stark change of tone emanating from the White House – and change of gear – has been noted. After years of steady consistency in US grand strategy, there is a sense of a building crisis and the Americans are being watched in anticipation of their next move more closely than they have been scrutinised in many years.

Before he left South Korea, Pence also visited Panmunjom, where the 1953 armistice was signed at the end of the Korean War, as well as Camp Bonifas, a UN military compound near the Demilitarised Zone, set up to monitor the ceasefire that followed. It is an eerie echo from the past that Pence’s own father served in the war that divided the country. Edward Pence was awarded the Bronze Star on 15 April 1953 for heroic service. The vice-president proudly displays the medal, and a photo of his father receiving it, in his office. He is no doubt aware of the costs of a conflict in which an estimated 36,000 of his countrymen were killed.

Just over a thousand British soldiers also lost their lives in the Korean War after being sent to fight in a joint UN force. But it was far more deadly still for the peoples of the Korean Peninsula, killing more than a million people, including 400,000 troops for the People’s Volunteer Army, among whom was Mao Anying, the eldest son of Chairman Mao, the leader of the Communist Party of China and protector of the North.

History throws up strange parallels. When the Korean War began in 1950 it was understood to be the first serious test of the international system established after the Second World War. It is striking just how many of the same ingredients remain, including the identity of some of the main protagonists. On 25 June 1950, a border conflict between North and South Korea escalated into full-scale war when Kim Il-sung’s Korean People’s Army – backed by China, and with the tacit support of the Soviet Union – invaded the Republic of Korea in the south, claiming that it represented the legitimate government of all Korea. This is a claim that the regime of his grandson Kim Jong-un has not abandoned to this day.

Two days after the invasion, on 27 June, the UN Security Council voted to send a joint force, under General Douglas MacArthur of the US, the former supreme commander of Allied forces in the south-west Pacific area, to protect the sovereignty of the South and repel the invaders. Much more was at stake than the question of territorial integrity or preserving international law. By bringing the Americans into confrontation with the Chinese – and with the Russians seen to be the steering hand in the background – the conflict had all the ingredients for rapid escalation.

From the start, there were concerns that the Americans might overdo the brinkmanship, even under the cautious leadership of Harry Truman. Fears that the self-confident MacArthur would exceed his brief were confirmed when the UN forces pushed back into North Korea in October. In response, the Chinese Communists, who believed that MacArthur had designs on China itself, flooded across the Yalu River in their tens of thousands.

It was in the autumn of 1950 that the danger of another world war, this one involving nuclear weapons, reached its peak. On 28 November, after a grave reverse for the UN forces, MacArthur stated that the advent of 200,000 Chinese had created “an entirely new war”, with much higher stakes than before. Suddenly, the prospect that the US might resort to using an atomic bomb against the North Koreans, or even the Chinese forces, seemed plausible.

While the nuclear scare passed, the war rumbled on towards an ugly stalemate over the next three years. A temporary solution of sorts was found with the 1953 armistice. But there was no resolution to Korea’s frozen war. In a way that no other totalitarian state has managed, the North zipped itself into a hermetically sealed chamber, preserving a three-generation dictatorship that is both comically anachronistic and frighteningly modern in its missile technology.

***

Some of this complicated backstory was explained to Donald Trump by China’s president, Xi Jinping, during his recent visit to the United States. Trump – who had been pressuring China to do more to deal with the North Korean regime – appears to have been receptive to what he heard.

“After listening for ten minutes,” he said, “I realised it’s not so easy.”

This is the first critical test of the “new era in great-power relations” which Xi has been floating for a number of years, but Trump has now decided to put to the test. According to Trump’s most recent tweets, Beijing has continued to work with the US on the North Korea problem. He has welcomed its contribution but insisted that America’s own willingness to deal with the problem does not depend on China. In other words, there is no master plan being played out here, even if – as seems credible – America did hack North Korea’s latest missile launch to make it a damp squib.

The Trump administration is not creating the conditions for a new long game, building a fresh multilateral consensus to contain the North Korean threat. Instead, with a newfound sense of momentum serving as a tail wind, it senses a moment to “solve” one of the longest-running and most treacherous problems in international affairs. It has decided, at the very least, to severely clip the wings of Kim Jong-un’s regime. And in doing so, it has set out to demonstrate that when America speaks, it speaks with effect.

Like much current presidential policy, “the Trump doctrine” is being made on the hoof. Much of the hyperactivity of the past month or so was not scripted but emerged in response to overt challenges – beginning in Damascus and panning to Pyongyang – to the United States and the “red lines” it has laid down in the past. One foundation stone of Trump’s approach to the world is firmly in place, however: the willingness to reassert US military power with swift and decisive effect. The idea that the “America First” slogan implied anything resembling isolationism is crumbling. The growing sense that it does imply unsentimental and unvarnished power politics in the name of the US interest rather than multilateral niceties is closer to the truth.

Under Barack Obama, the US sought to withdraw from those areas in which he felt that the US had overstretched itself under his predecessor. Obama opted for a more rapier-like and cost-effective form of power projection. He drew down from formal military operations in Iraq and Afghanistan, while presiding over a huge uptick in drone warfare, cyber capabilities and selective but deadly use of special operations. Much of the full range of US power was submerged in various “secret wars”, and the diplomatic compass was reset to pivot east. This was because, as a legacy of the 9/11 attacks, national security was geared towards the containment of an elusive and amorphous enemy – various offshoots of the global jihad movement – that operated on the periphery of America’s radar.

But the real metrics of great power are those now on display off the coast of North Korea. For all the advances in drone technology, the missiles that cause the gravest threats to humanity are those on the scale that the North Korean regime is attempting to build. Trump’s test was one that a president of the United States would have to face sooner rather than later.

Not since Ronald Reagan has the US been so willing to engage in naked displays of its own military potency in quick succession – and seek to gather diplomatic yields from them as swiftly as possible. The past fortnight brought a missile attack on an airbase manned by the Assad regime – changing the tenor of US-Russian relations overnight – and the dropping of the so-called Moab (“mother of all bombs”) on an Isis affiliate in Afghanistan. The latter was a far cry from the “clear, hold, build” counterinsurgency operations in vogue half a decade ago. But it did fit with a campaign promise by the new president that he would “bomb the shit out of Isis” should the opportunity arise.

Does this fit into a wider pattern or constitute a new approach? The Trump administration is eager to leverage any opening that might have been created. In Seoul, Pence wasted no time in joining the dots: “the world witnessed the strength and resolve of our new president in actions taken in Syria and Afghanistan”. North Korea, he continued, “would do well not to test his resolve, or the strength of the armed forces of the United States in this region”.

It is the generals who have increasingly set the tone for Trump’s foreign policy. During the 2016 election campaign, he promised to give the Pentagon more leeway than it had under Obama to focus on “winning”. The new national security adviser, H R McMaster, and the defence secretary, General James Mattis, are now the steering hands.

Neither man has followed the rather crass and short-sighted fashion for running down diplomacy. Mattis once said that if the state department budget was cut, he would need more ammunition. McMaster is an urbane thinker who knows that the use of force must always be carefully calibrated and is just one tool in a continuum of factors. In this respect, it is a problem that so many jobs in the state department remain unfilled. Now that muscle has been flexed, the experienced negotiators and diplomats should be flooding through the door.

***

The policy of “strategic patience” was based on an understandable calculation. But, in hindsight, it does appear that North Korea has suffered from neglect. Mitchell B Reiss, one of the most experienced diplomats who led efforts on North Korea in the 1990s, notes that, despite unprecedented co-operation between the US and China in recent weeks, including open threats of economic pressure and military action, they were still unable to prevent North Korea from testing ballistic missiles on 16 April. Even though the missiles exploded immediately after lift off, “The failure of Washington and Beijing to stop the test in the first place has important implications for the Trump administration’s future policy options and for stability in north-east Asia.”

In Reiss’s view, it is “highly unlikely that the North can be cajoled, threatened or given incentives to surrender its nuclear weapons”. The uncomfortable truth is that “short of regime change, which could inflame the entire Korean Peninsula in war”, the US cannot halt the North’s nuclear weapons programme. But that does not mean there are no options. Slowing the pace and raising the costs would be “prudent steps”. More, too, could be done, Reiss says, to “interdict imports of sensitive technologies, to sanction Chinese and other nationals who act as purchasing agents for the nuclear and missile programmes, and to punish Chinese banks that help finance these programmes through so-called secondary sanctions”.

In the end, so much comes down to US-China relations. Could this be the basis for a reset and a new accommodation between Beijing and Washington? How much further is China willing to go to use its leverage on the North, which depends on it for energy and food? And how patient will the Trump administration be if its new strategy does not yield tangible results of the sort that are sometimes elusive in the long and often open-ended game of deterrence? 

John Bew is a New Statesman contributing writer and the author of “Realpolitik: a History” (Oxford University Press)

John Bew is a New Statesman contributing writer. His most recent book, Realpolitik: A History, is published by Oxford University Press.

This article first appeared in the 20 April 2017 issue of the New Statesman, May's gamble

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