Trading Tito for Gill

President Zuma’s announcement yesterday (Sunday) that Gill Marcus will replace Tito Mboweni as Governor of the SARB in November is likely to feed anxieties about policy continuity – despite reassurance that policy at the SARB will not change under Marcus.

The issue is not that Marcus is less competent or more likely to side with organised labour’s attacks on inflation targeting or that she would join the ANC’s leftwing allies and support forcing down interest rates and the currency. If anything Marcus’s experience as outgoing Chairperson of ABSA and the markets’ experience of her in previous positions as a SARB deputy governor and deputy minister of Finance are positives.

The issue is rather one of timing. Zuma’s Sunday press conference came out of the blue and his explanation for why the sudden announcement was awkward:

I have re-appointed Mr Mboweni as Reserve Bank governor. However, he has indicated his wish to leave in November 2009 to pursue other interests.

Given the indication from Mr Mboweni, I have therefore decided to designate Gill Marcus as governor of the Reserve Bank with effect from the 9th of November 2009.

 Markus was in exile with the ANC and played an important role at ANC headquarters in Lusaka in the 1980’s. She was a member of the ANC NEC from 1991 until 1999. This makes her a more senior ANC politician than the deployed Tito Mboweni. There is speculation that Marcus fell foul of Thabo Mbeki  before she left government and the ANC NEC in 1999 – which, in and of itself, could put her closer to the “Zuma Camp”. However, these relatively deeper ties into the ANC and its current leading faction, will not necessarily make her a more compliant SARB governor.

The problem with the timing of the appointment is that Cosatu has been pushing for the non-renewal of Mboweni’s contract and doing so by marching on the SARB to hand over petitions and by threatening mass strikes. In an environment where macro-economic policy (including monetary policy, nationalisation and privatisation and aspects of trade policy) are less certain than they have been since 1996, appearing to give in to this trade union demand is not going to do much for financial market confidence.

This surprising appointment is a useful microcosm for perceptions about policy instability in South Africa under the Zuma government. The appointment is a good one (as far as it goes) but by making it now government has essentially deposed the person who has come to represent policy certainty (in this case inflation targeting). The action fails if it is seen as part of a strategy of communicating with financial markets.

One thought on “Trading Tito for Gill

  1. Dear Mr. Borain ,

    You omit to mention that Marcus is a Communist ( SACP BOLSHEVIST ) . Why?

    The Black Book of Communism
    Crimes, Terror, Repression
    Stéphane Courtois
    Nicolas Werth
    Jean-Louis Panné
    Andrzej Paczkowski
    Karel Bartosek
    Jean-Louis Margolin
    Edited by Mark Kramer
    Translated by Jonathan Murphy
    Already famous throughout Europe, this international bestseller plumbs recently opened archives in the former Soviet bloc to reveal the actual, practical accomplishments of Communism around the world: terror, torture, famine, mass deportations, and massacres. Astonishing in the sheer detail it amasses, the book is the first comprehensive attempt to catalogue and analyze the crimes of Communism over seventy years.

    “Revolutions, like trees, must be judged by their fruit,” Ignazio Silone wrote, and this is the standard the authors apply to the Communist experience—in the China of “the Great Helmsman,” Kim Il Sung’s Korea, Vietnam under “Uncle Ho” and Cuba under Castro, Ethiopia under Mengistu, Angola under Neto, and Afghanistan under Najibullah. The authors, all distinguished scholars based in Europe, document Communist crimes against humanity, but also crimes against national and universal culture, from Stalin’s destruction of hundreds of churches in Moscow to Ceausescu’s leveling of the historic heart of Bucharest to the widescale devastation visited on Chinese culture by Mao’s Red Guards.

    As the death toll mounts—as many as 25 million in the former Soviet Union, 65 million in China, 1.7 million in Cambodia, and on and on—the authors systematically show how and why, wherever the millenarian ideology of Communism was established, it quickly led to crime, terror, and repression. An extraordinary accounting, this book amply documents the unparalleled position and significance of Communism in the hierarchy of violence that is the history of the twentieth century.

    Stéphane Courtois is Director of Research at the Centre National de la Recherche Scientifique (CNRS) in Paris, and editor of the journal Communisme.

    Nicolas Werth is a researcher at the Institute for Contemporary History.

    Jean-Louis Panné collaborated on the Dictionnaire biographique du mouvement ouvrier français.

    Andrzej Paczkowski is Deputy Director and a professor at the Institute for Political Studies of the Polish Academy of Sciences.

    Karel Bartosek is acting head of research at CNRS and the editor of the journal La nouvelle alternative.

    Jean-Louis Margolin is a lecturer in history and coordinator of lectures at the University of Provence and a researcher at the Research Institute on Southeast Asia of CNRS.

    Of the tens of thousands of books on the communist experience, this one resource stands out above all the rest—a massive and fitting epitaph for a totalitarian and bloodthirsty theory that killed one hundred million people in the 20th century.

    The historians writing in this 850-page book cover Lenin’s murders, Stalin’s Gulag, Mao’s Great Leap Forward and Cultural Revolution, Pol Pot’s Khmer Rouge, and every other case of shocking crime and horror. The narrative moves constantly from the big picture to millions of deaths to the smallest look at how people in the midst of famine turned toward eating the dead.

    They establish for all time that the machinery of communism is fueled by crimes, terror, and repression, and ends predictably in massacre.

    The book appeared first in France as a collection of pieces by writers with some social-democratic sympathies. They only sought to tell the truth so far as it could be documented. Each is a specialist in the nation and period covered. They pull together all that is known and write an excellent narrative that provides the summary judgment.

    What was astounding was the reaction. Not only in France but all over Europe there was sudden, palpable, and extended shock and protest—as if the intellectuals in these countries had never faced the grim reality. The source of the controversy was just as disgusting. You see, Europe’s communist parties are still in existence and even flourishing. Former communist officials hold prestigious posts in government. Were these authors saying that these nice gentlemen are actually apologists for mass murder?

    Well, yes.

    It was also said that by highlighting the crimes of communism, there is a danger of putting the crimes of Nazism into the background. The idea here is palpably absurd. The key issue here is that the crimes of the Nazis are well known whereas the crimes of the communists are routinely whitewashed in the highest circles of academia and government.

    In any case, this book stands as the ultimate refutation of the entire gang. It also makes for stunning reading, though it is probably impossible to read straight through without feeling a profound sickness. The detail is fascinating and you find your jaw dropping on every page, whether the subject is Russia, China, Africa, the Far East, or Latin America.

    In some ways, this book is a great complement to Mises’s own book Socialism. He predicted and explained all of this in his 1922 treatise, and the intellectual establishment never forgave him for it. Three quarters of a century later, the book that historical documented all of Mises’s predictions appeared, and the establishment has not forgiven them either. Regardless, this book is an overwhelming vindication of Mises’s position.

    It is simply not possible to read this book and come away with the slightest sympathy for socialist/communist theory or the states that enact policies along these lines. Not even the authors themselves fully grasp what their own documentation has done to the statist religion of our time.

    Read it, but prepare to weep, and fight against everything communism was and is.

    Harvard edition
    Hardback, 78 halftones, 6 maps 912 pages

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