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Viewing cable 08DURBAN77, PARTIES DEBATE ECONOMIC POLICIES AHEAD OF 2009 ELECTIONS

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Reference ID Created Released Classification Origin
08DURBAN77 2008-12-15 10:36 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Durban
VZCZCXRO6190
RR RUEHBZ RUEHJO RUEHMR RUEHRN
DE RUEHDU #0077/01 3501036
ZNR UUUUU ZZH
R 151036Z DEC 08
FM AMCONSUL DURBAN
TO RUEHC/SECSTATE WASHDC 1370
INFO RUCNSAD/SADC COLLECTIVE
RUEHDU/AMCONSUL DURBAN 0743
UNCLAS SECTION 01 OF 02 DURBAN 000077 
 
SENSITIVE 
SIPDIS 
 
FOR AF/S 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN SF
SUBJECT: PARTIES DEBATE ECONOMIC POLICIES AHEAD OF 2009 ELECTIONS 
 
DURBAN 00000077  001.2 OF 002 
 
 
1. (SBU) Summary: On November 26, 2008 South African political 
parties confirmed their optimism about the future of the South 
African economy and highlighted areas of concern in a lively 
university-sponsored debate in Durban. The political party 
representatives did not have major ideological or policy 
differences on the economic policy issues they discussed, but 
the opposition took the opportunity to critique some policies of 
the ruling African National Congress (ANC). The tone of the 
discourse was generally serious, but as the opposition party 
debaters "ganged up" on the ANC, the ANC representative resorted 
to political tactics rather than persuasive rebuttals. End 
summary. 
 
Introduction 
 
2. (U) The Graduate School of Business at the University Of 
KwaZulu-Natal (UKZN) invited five parties to participate in a 
structured debate of economic policy issues on November 26, 
2008. Four political parties participated in the economic policy 
discussion: the African National Congress (ANC), Congress of the 
People (COPE), Democratic Alliance (DA), and Inkatha Freedom 
Party (IFP). The ANC was represented by Sihle Zikalala, 
Provincial Deputy Secretary, COPE, by Phillip Dexter, National 
Policy Coordinator, IFP, by Narend Singh, MP and Spokesperson on 
Finance, DA, by Mike Walters, MP and Spokesperson on Finance. 
Minority Front leader Amichand Rajbansi was invited, but did not 
attend the debate. Over 200 people, including faculty, students, 
journalists, politicians, and members of the business community 
were in the audience at UKZN. 
 
Lively Debate: Opposition Unified in Criticisms of ANC 
 
3. (U) All party representatives agreed that the current global 
economic meltdown has been unprecedented and posed serious 
challenges for South Africa (SA). However, they noted that the 
South African economy has so far been protected due to its 
positive economic policies. Opposition party debaters repeatedly 
raised concerns about the uncertainty caused from "mixed 
signals" on the country's economic policy sent by senior 
leadership of the the ANC (namely ANC President Jacob Zuma). The 
ANC representative, Mr. Zikalala, denied that there were 
conflicting signals about ANC economic policy, noting that all 
statements were consistent with the policy determined at the 
Polokwane National Conference in December 2007.  He argued that 
current economic policies were working, but just needed to be 
revamped in some areas. 
 
4. (U) All debaters agreed that the gap between the rich and the 
poor remained huge and that unemployment was still the biggest 
challenge facing South Africa. The speakers also agreed that 
rural economic development and skills development needed to be 
addressed for South Africa's economy to prosper. The speakers 
also addressed a range of more technical issues including 
inflation targeting, interest rate hikes, fiscal policy, labor 
law flexibility, and deregulation. COPE's Dexter cautioned 
against government interference with the work of the Reserve 
Bank. 
 
5. (U) Opposition party representatives argued that BEE has 
failed and a new empowerment strategy was needed. The ANC's 
Zikalala said that BEE is working but he conceded that it should 
be fine-tuned and monitored more closely to ascertain its 
success.  All the opposition party representatives backed tax 
relief for businesses, particularly small and medium 
enterprises. 
 
6. (U) The debaters discussed the role of the state in the 
economy and the degree of necessary intervention. The DA 
representative strongly opposed the idea of state intervention 
in the economy. COPE's Dexter raised concerns about the 
inefficiency of state enterprises and called for a re-evaluation 
of public enterprises to gauge their impact in the economy. COPE 
also suggested that a new, clearer industrial policy was needed 
in SA and that it must take into account the diversity and 
competitiveness of the South African economy. 
 
7. (U) Opposition party representatives also raised concerns 
about the poor state of the public service and government 
workers. They claimed that rampant corruption and patronage in 
the public service has negatively affected South Africa's 
economic growth. 
 
ANC Politicizes Discussion 
 
8. (SBU) When he found himself under increasing pressure from 
opposition party criticism and unable to provide solid answers, 
the ANC's Zikalala blamed apartheid for current inequalities and 
argued that in 1994 the ANC inherited a dysfunctional economy. 
He raised tensions when he attacked COPE on the issue of its 
name and called Mr. Dexter a "traitor" and "former comrade." 
 
DURBAN 00000077  002.2 OF 002 
 
 
During a question-and-answer session, ANC supporters also 
directed criticism at the IFP, raising decades-old issues. 
Zikalala's political statements prompted supporters of the ANC 
(mainly students from the university) to shout at the COPE 
representative Mr. Dexter and other opposition party 
representatives during the debate. 
 
Comment 
 
9. (SBU) The debate was an important platform for political 
parties to "market" their economic policies to an audience made 
up of influential academics and private sector representatives. 
The ANC was at the receiving end of many criticisms of its 
economic polices, and it was striking to see that the party sent 
a fairly junior official to argue its case. Mr. Zikalala was 
clearly unprepared to debate facts and figures. One of the few 
senior ANC leaders in KZN who could have engaged in a more 
serious level of debate is provincial party chairperson Dr. 
Zweli Mkhize.  It is disappointing that not many other suitable 
alternatives come to mind--and makes us wonder if this lack of 
deep thinkers and articulate debaters may keep the ANC from 
participating in other meaningful public debate. 
Also, although South Africa's well-regulated financial sector 
and exchange controls against derivative purchases protected its 
economy from first-round impacts of the global financial crisis, 
the country will not be able to avoid the second round effects 
caused by the broader economic crisis. 
DERDERIAN