Two key departments take shape

Nine months after they were first announced by President Jacob Zuma, two new but key government departments in the highly contested economic policy sphere are finally starting to take shape. But both Trevor Manuel’s National Planning Commission and Ebrahim Patel’s Economic Development departments are still a long way from delivering the promised goods.

However, while the battle for control of the government’s economic soul continues – leaving investors apprehensive and analysts consulting the "I Ching" – the latest developments do show, if anything, that the Left, asrepresented by Patel, and the more conservative centre, as represented by Manuel, are closing the gap and moving closer to a workable compromise.

For two weeks after the uneasy departure of Patel’s special adviser Neil Coleman, a committed socialist and trade unionist, Patel has appointed two public service heavyweights – neither of them readily associated with the Left and one a long-time Treasury official serving under Manuel – to senior positions in his department.

At the same time, Manuel has ditched all aspirations of securing executive powers for himself and his yet-to-be-appointed commissioners. This move means he will not regain any of the economic policy-making influence and control he had when still Finance minister – something the Left has been accusing him of wanting to do.

Instead, Manuel was at pains on Friday when he announced the process to appoint his commissioners to allay the Left’s fears that he would try to usurp much of the role of Cabinet as a kind of “super minister” exercising control over other departments.

Announcing the process to appoint the “best, brightest minds” in the country to the 20-member National Planning Commission (NPC), Manuel said the revised Green Paper on national planning made it clear that the NPC would have no executive powers and that the Cabinet would have the final say on policy formulation.

This makes it clear that Manuel and the NPC will play an advisory role to the government, with the Cabinet having the final say on policy formulation. Manuel’s direct responsibility in respect of the development of the Medium-Term Strategic Policy Framework and the government's programme of action has also been diluted in the process.
At the same time, though, it now seems clear that control over economic policy formulation will not be ceded to the Left either, as has been demanded vigorously in recent months by the ANC’s left-wing allies, the South African Communist Party (SACP) and the Congress of South African Trade Unions (Cosatu).

But if Manuel and the moderate centre wish to retain, through the NPC, any firm measure of influence over South Africa’s future economic direction, it will depend heavily on Manuel’s personal political relevance within the context of the ANC and the Alliance, and also on the extent to which Manuel enjoys President Zuma’s confidence.

However, despite Manuel’s apparent willingness to reach a compromise with the Left, they still do not trust him, as is evident from the comments attributed over the weekend to Cosatu spokesperson Patrick Craven that "we are still studying the document (Manuel’s revised Green Paper)... we will be looking to see what there is in the small print."

Manuel is aware that his latest move could yet meet with more resistance from the Left. Saying there is a “fair amount of support” for his revised Green Paper, he added that not everyone would be satisfied.

Meanwhile his NPC, once appointed after applications close on 10 February, will have as its first task the drafting of a “Vision 2025” and a long-term strategic plan to be released in 18 months' time. A secretariat consisting of a small number of highly competent, experienced professionals based in the Presidency would also be established to provide technical, administrative and professional help to the commission.

The opposition Democratic Alliance (DA) has been very critical of the government’s decision to bypass the drafting of a White Paper in the process to set up the NPC. While the decision may hasten the setting up of the NPC, no real action or results can be anticipated from this body for at least another year to 18 months. This means anything tangible coming from the NPC will only be seen about two years after President Zuma first appointed Manuel as Minister in the Presidency for National Planning – if the Left does not cause further delays.

During the fierce battle for control over economic policy matters these past nine months, Cosatu and the SACP had hoped to persuade President Zuma to transfer the economic policy function to their nominee, Economic Development Minister Patel. That had been resisted, with the Left’s pressure resulting only in partial concession. And now it appears that Patel has shifted his position closer to a centred compromise.

This is evident from the announcement that Public Service and Administration director-general Professor Richard Levin (pictured) has been transferred to the Department of Economic Development as its new director-general effective from February. Patel also announced the appointment of Olano Makhubela as chief director for Economic Policy in the department.

Both are seasoned bureaucrats with a wealth of policy-making experience who bring no obvious political baggage with them. And while in both cases traces of socialist influence could be pinpointed in their early academic training, neither have displayed any obvious tendencies of this nature in their professional careers.

In fact, Makhubela could almost be said ironically to have been a product of the Manuel-Mbeki era of economic policy-making so hated by the Left and contemptuously labelled “the 1996 class project” by it, as he previously worked for nine years in the National Treasury under Manuel where he has been chief director of the Financial Sector Development Unit.

Makhubela holds a Master's degree in Development Economics from the University of London.

Levin, who has been the director-general of the Department of Public Service and Administration since July 2004, holds a PhD from the University of Liverpool. He is a Visiting Professor at the University of the Witwatersrand's School of Public and Development Management and an Extraordinary Professor of Public Administration at the University of Pretoria.

Since Patel’s appointment by Zuma nine months ago, Patel’s new Economic Development department seemed trapped in the crossfire between the factions competing for control of economic policy. This triggered extensive debate and much controversy over possible turf and ideological wars among various competing ministries in the new-look Zuma government.

Patel’s appointment had been interpreted by many as a sop to the Left, raising questions whether his new department would ever find a niche in the government and get off the ground. And the Left wanted his ministry to assume the policy-making role previously held by the Treasury and the Department of Trade and Industry.

To some extent, the appointments of Levin and Makhubela will have countered the concern that Patel’s department is a mere shell without substance or any clear role. These two certainly bring strong expertise and experience in development planning and policy-making to the department, while their appointment at the same time tends to lessen the assumption that the Department of Economic Development would become a bastion of left-wing policy aspirations.

The latter is further strengthened by Coleman’s departure from his job as Patel’s special adviser. Coleman, coming from a strong left-wing labour background and who, like Patel, had been seconded from Cosatu, left amid (officially denied) rumours of a fallout between him and Patel over the latter’s alleged tendency to micro-manage.

However, as in the case of the NPC, some nine months after Patel was appointed a minister, this department now seems to be taking shape slowly. But, as in the case of the NPC, it may be a long time yet before it will start delivering whatever it is intended to do. Much more structure needs to be established, many more appointments have to be made, and its mission and core functions still need to be spelt out clearly, as are the actual responsibilities of Levin and Makhubela.

In a joint statement by Patel and Public Service and Administration Minister Richard Baloyi, Levin’s immediate responsibility was said to be “to take the establishment of the Economic Development department into its second phase”, whatever that may mean, apart from making further staff appointments and transferring the department’s financial management function from the Department of Trade and Industry.

So while the turf battles may have lessened, the gap between the Left and centre may be narrowing, and Zuma’s new ministries may be taking shape, much uncertainty still prevails in the economic policy sphere of government.