Economist.com Cities Guide: Johannesburg Briefing - August 2005

News this month

To help or not?

Once again, Zimbabwe, South Africa's troubled northern neighbour, is consuming local attention. The South African government is pondering whether to bail out the regime of Robert Mugabe, the Zimbabwean president, which faces expulsion from the International Monetary Fund (IMF) for not paying its bills. The package said to be under consideration would cover part of Zimbabwe's $290m of IMF arrears and may also allow the country to buy much-needed fuel and food. However, South Africa might attach conditions for Mr Mugabe, including the restoration of the rule of law, economic reforms and talks with the political opposition.

Zimbabwe’s disastrous economic policy, along with several years of drought, has left the country in tatters. Making matters worse is Mr Mugabe's recent razing of markets and dwellings, which has destroyed much of the vital informal economy and rendered 700,000 people homeless or without livelihoods, according to the UN. Although Mr Mugabe's actions have been widely condemned internationally, African countries have largely remained silent. As the regional superpower, South Africa's preferred—and so far ineffective—policy of “quiet diplomacy” has come in for particular criticism.

Dying by numbers

That South Africa has one of the highest incidences of HIV/AIDS in the world is well documented. But figures released in July reveal that even more South Africans are suffering from the virus than was previously thought. According to Department of Health statistics, up to 6.6m South Africans could be infected, well surpassing the previous estimate of 4.5m from Stats SA, the national statistics agency. Both figures indicate that South Africa's half-hearted campaign against the disease is not making much progress. After years of denial, the government only recently started rolling out anti-retroviral (ARV) drugs, and only 50,000 or so patients are receiving treatment in the public health sector. A similar number of patients is cared for privately, but this falls well short of the 1m people estimated to need drug treatment.

Yet July brought a glimmer of good news. Merck Sharp and Dohme, the third-largest pharmaceutical company in America, has given Aspen Pharmacare, Africa’s largest generic medicine-maker, a licence to produce copies of efavirenz, its patented AIDS drug. This should boost the availability of ARVs in South Africa.

Happy birthday, Madiba

Nelson Mandela, South Africa’s former president, turned 87 on July 18th. His birthday was celebrated on a grand scale, beginning with a torch-lighting ceremony in his former prison cell on Robben Island. The torch was then carried across the country to raise awareness of HIV/AIDS (Mr Mandela's son died of the virus earlier this year); its journey ended on July 23rd at Ellis Park, Johannesburg's main sport stadium, where it was used to light a gigantic birthday cake. Afterwards Mr Mandela watched the Springboks, South Africa's rugby team, swiftly defeat the Australian Wallabies.

Celebrations aside, Mr Mandela is embroiled in a court battle with Ismail Ayob, his former legal counsel, over the alleged misuse of his name and artwork. The former president claims he had to fire Mr Ayob for financial mismanagement and irregularities related to artwork projects. But shortly before Mr Mandela's birthday, Mr Ayob filed a 320-page affidavit at the Johannesburg High Court, claiming that, far from being fired, he was forced to resign due to his former client’s deteriorating mental state. The saga is expected to run for some time.

Faster, please

Thabo Mbeki, South Africa's president, is keen to boost the country's economic growth. To this end, he announced in July the creation of a new task force to boost the GDP growth-rate above 6%. Headed by Phumzile Mlambo-Ngcuka, the new deputy president, the team will include Trevor Manuel, the finance minister, Mandisi Mpahlwa, the minister of trade and industry, and the premiers of Gauteng province, which includes Johannesburg, and Eastern Cape. Although South Africa's private sector has earned the most criticism in the past, Mr Mbeki suggested that public-sector investment would be the priority. The government is planning on spending 180 billion rand ($27 billion) on labour-intensive infrastructure projects.

South African economic policy has created a stable macroeconomic environment, but the country’s 3-4% GDP growth is insufficient to make a dent in the crippling level of unemployment, estimated at over 40%. The new force hits the ground running—its recommendations are expected by September.

Ground-bound

Late July brought bad news for South African Airways (SAA), the national carrier, when failed wage negotiations grounded its planes in SAA's worst-ever strike. SAA had offered a 5% wage increase across the board, but unions, emboldened by the airline's healthy financial results after several years of severe losses, insisted on 8%. Matters were not helped in May, when news about the expensive travel habits of the airline’s chief executive surfaced at a time when SAA is slashing costs.

After six fraught days, a compromise 6% increase, with some other benefits, was agreed on July 27th. During the dispute, the airline had to cancel most of its regional African and overseas flights, and domestic services were severely disrupted. The Democratic Alliance, the official opposition party, said the cost of lost business and compensation for inconvenienced travellers would come to at least 25m rand per day (striking workers lost a week's wages). Disgruntled travellers turned to competing regional and domestic airlines, which saw a substantial increase in traffic.

Catch if you can

August 2005

“Hostile Takeover”

Until August 21st 2005

Following his acclaimed play “Green Man Flashing”, Mike Van Graan has written another biting theatrical satire on the politics of the “new” South Africa. In “Hostile Takeover”, a white former diplomat from the apartheid era has become a strip-club owner in order to pay his bills. When someone with an eye on his business tries to have him killed, the strip-club owner finds he has to use diplomacy to negotiate for his life with his would-be assassin.

This dialogue—with each man defending his line of work and principles—offers an allegory of the political and economic transformation of South Africa. The play ends with a twist, illustrating the grim reality of economic redistribution between black and white South Africans.

Market Theatre, 56 Wolhuter St, Johannesburg. Tel: +27 (0)11 832 1641. See the theatre's website.

More from the Johannesburg cultural calendar