Salaam Saddam?; Alarming Omar; Boesak: Stand by your man?; Bargain basement at Telkom?; Sauce for the (flying) goose?

Refocus 1/2.


The news that South Africa is to host the Non-Aligned summit next year is a mixed blessing. It appears this role has been wished on the government by the NAM and that the not very attractive deal is that in return for chairing the event South Africa will have to pay for the accommodation and security arrangements of the 113 delegations plus, no doubt, sundry gifts, special tours and entertainments.

Pretoria should have woken up to this sort of deal after the UNCTAD conference was held here. South Africa, in the shape of Alec Erwin, was allowed to assume the chairmanship - the first time a Communist Party member had ever been allowed to head a UN body. But that was the clue: nobody cared anymore because UNCTAD had ceased to matter, having been overtaken by regional trade areas on the one hand and replaced by the World Trade Organisation on the other. Getting the chairmanship was not such a big deal.

Similarly, the NAM is a clapped out and ineffectual organisation: chairing it is no great honour. Even during the Cold War the NAM made little sense, for the organisation welcomed many strongly aligned states such as Cuba and China while ignoring such historic neutrals as Sweden and Switzerland. Since the Cold War ended the NAM hasn't been able to answer the obvious question about exactly what it is non-aligned between.

In practice what the NAM boils down to is one more arena for a lot of windy Third World rhetoric, attacking the imperialist West and demanding all manner of impossible or unlikely things from it at the same time. Nobody in the West has been listening to or bothering about any of this for at least 20 years now. From that point of view the summit is harmless enough, if a waste of money.

The real problem is that the people who really like attending such meetings are the pariahs who don't get invited many places else (Assad, Castro, Gadaafi, Saddam Hussein, Abacha etc). In addition, a NAM summit usually attracts the leaders of some pretty unsavoury 'liberation' movements - the Khmer Rouge, the Shining Path, Hamas and so on. Thus far the government has kept most such folk at a decent distance but it will be impossible to prevent them attending the NAM summit if they want to come.

This is virtually bound to produce photo opportunities for Mandela and Gadaafi-Saddam

Hussein-Abacha and so on which will go round the world and do considerable damage to South Africa, both in the public eye and in the markets. This could make the decision to host this event a great deal more expensive even than it looks.


The decision by Dullah Omar, Minister of Justice, to give Allan Boesak a returning hero's welcome at Cape Town airport, together with his statements of undying political support for Boesak, his predecessor as leader of the Western Cape ANC, have inevitably raised a storm of protest.

It is certainly odd to see a Minister of Justice saying he will 'stand by' a man charged with 20 counts of theft and 12 of fraud, with sums of nearly R9 million involved, but the real questions raised by Omar's intervention are about the rule of law and judicial independence. It is difficult to imagine that members of the judiciary and the legal profession throughout the land will not have taken note of this further strong signal that to apply the rule of law equally is to risk the wrath of the government if leading ANC members are involved. The fact that the South African Council of Churches has also taken a position in support of Boesak merely suggests once again that God moves in some mysterious ways.

The question has to be asked whether Boesak would ever have come to trial if his alleged misdemeanours had been committed in any of the seven provinces where the provincial attorneys general owe their appointments to an ANC majority. Similarly, if one looks at the composition of the Constitutional Court or the way in which the Chief Justice of the Supreme Court was selected, one has to wonder if Boesak wouldn't be on far friendlier ground if he could somehow get his case before one of these august bodies.

All of which makes extremely ominous Omar's introduction of the so-called 'Super Attorney-General Bill' which seeks to make operational Clause 179 of the Constitution, allowing for the appointment of a National Director of Public Prosecutions, appointed and sackable by the government, with power to 'review a decision to prosecute or not to prosecute' anywhere in the land.

The Constitution specifically states that the Minister of Justice 'must exercise final responsibility over the prosecuting authority', which means that the Minister will, effectively,

obtain power to override any provincial attorney general on anything. Moreover, all existing provincial attorneys general will be deemed under the Bill to have been appointed provincial Directors of Public Prosecutions from the date of their original appointment - and since their appointments are for fixed terms, this will allow the Minister to fire any provincial attorneys general that he doesn't like.

At the moment Omar has insisted that he hasn't interfered to stop the prosecution of Boesak as if he had had the power to do so. But he is simultaneously taking steps to ensure that he will have power to do precisely that.


Despite all the ANC protestations of unconditional support for him, Boesak has cause for worry. It should not be forgotten that his initial line of defence against the allegations against him was simply that he wasn't good at arithmetic and that when all this extra money kept on cascading into his account he simply accepted it as heaven's bounty without wondering whether his foundation's money wasn't getting mixed up with his own. As a defence against multiple charges of fraud and theft this could hardly be described as particularly robust.

The real question was whether Boesak had used his lengthy sojourn in the US to come up with something rather stouter than that. The speed with which he has fallen back on the Jesse Jackson tactic of claiming that 'the struggle is on trial1 rather suggests not: in effect this is an appeal for political justice.

What Boesak has to consider is the precedent of Winnie's Stompie trial. The ANC declared that this was a political trial, a claim which enabled the Defence and Aid Fund to pay Mrs Mandela' legal costs. A large number of ANC high-ups, including Nelson Mandela and Joe Slovo, attended the trial. There was a great deal of clenched fist saluting from the court steps, cries of 'Amandla!' and so on. Yet when Winnie was found guilty the movement accepted the verdict, encouraged her to pay the fine (and thus admit guilt), and we have never heard any more of the theory that this was 'apartheid justice'.

Politically, Winnie survived this verdict but she was not intending - as Allan Boesak is - to make her career in the church, One can only reflect that with such daft events as synchronised swimming now included in the Olympics, the possible coming of the Olympics to Cape Town is bound to see demands for the Games to include ever more novel forms of human endeavour and that the Boesak case may present us with one: the moral high jump.


So much PR disguised as journalism has accompanied the sale of 30% of Telkom to the consortium of Telekom Malaysia (12%) and SBC Communications (formerly Southwestern Bell) (18%) that it is difficult to assess the deal properly. Crucially, the government eschewed the sensible route of a proper, transparent flotation of 51 % or more of the shares that would undoubtedly have brought ail manner of bidders into the open market.

Instead, would-be bidders were told the government would retain firm management control and that the 30% share would be 'allocated' in backstairs bargaining, with even the arrangement fee paid to the bankers setting up the deal kept a closely guarded secret. This, together with rumours of strong government demands for job creation, affirmative action appointments and a huge 'roll-out' of lines to areas previously judged uneconomic caused several other potential bidders, notably France Telecom and Deutsche Telekom, to back off.

The result was the complete collapse of the secret auction: the SBC-TM consortium was the sole bidder and paid only R5.58 billion for its 30% stake, a price which puts a value of only R 8.6 bn ($4.18 bn) on the entire network. As it happens Turkey's Telecom was simultaneously privatising -at a price five times higher. The question to which Telkom's owners - South Africa's taxpayers -deserve an answer is how come their national telecommunications network is being valued at only one fifth of Turkey's?

The price is actually even lower than it looks, for the government's promise of a continued monopoly for years ahead is worth a lot of money on its own. Indeed, given that the World Trade Organisation has just got 69 countries to sign an agreement opening their telecoms market to free competition by 1998, this guarantee that South African consumers will not benefit from competition is soon going to look a little odd.

The hard question for SBC-TM is whether they have bought a pig in a poke. The reason why the price they paid was so low - and why other potential bidders bolted - becomes clear when one looks at the sweeteners they have had to promise: more than R 100 million in scholarships, bursaries and assistance to historically black universities, R2.3 billion on training courses for black employees and, above all, a commitment to roll out 2.7 million new phone lines and upgrade 1.25 million others. The cost of this roll-out programme has been hurriedly revised from R32 billion to R53 billion.

On top of all this jay Naidoo has announced that he expects 50 000 new jobs in telecommunications - a surprising commitment when one considers that elsewhere in the world privatisation has generally seen the slimming down of previously overmanned state enterprises. Since Telkom itself was managing to install only 250 000 new lines a year it is clear that near miracles are now expected of the new minority shareholders.

Three interesting questions emerge from ail this. In effect the value put on Telkom has been massively and artificially depressed by the onerous terms placed on the deal. Will this artificially lower price now be used to evaluate the 10% of shares to be handed over to black empowerment groups? If so, the state will be simply giving away money galore to already well-heeled black businessmen.

Second, a package of bursaries, scholarships and university aid is hardly a normal part of a privatisation deal. Could it be that the government, scared of criticism of 'selling out' from Cosatu and Sasco militants, has bought the Former off with promises of more jobs and the latter off with extra bursaries?

Third, SBC-TM are going to have to inject a great deal of capital to meet the huge costs of the rollout programme - and one must also expect Telkom's debt to rise sharply for the same reason. It is impossible to imagine that SBC-TM are going to make any profit out of all this unless they are ultimately given a majority share in the business. Was there a secret clause somewhere promising them this?


The basic reason for selling only a 30% stake in Telkom was that this was the only way the deal could be made acceptable to Cosatu. So how come Stella Sigcau's sudden announcement that the government plans to sell 49% of Sun Air and 100% of SAA?

The reason lies essentially in the fact that Mac Maharaj is not only the best minister in the government but is without much doubt the best Minister of Transport we've ever had. He has quietly and undemonstratively pushed ahead with a comprehensive programme of transport privatisation, taking on and defeating one pressure group after another in a virtual tour de force. Crucially, he allowed the BA-Comair linkup, made no move to stop a price war on domestic air routes, and refused to insist that the Airports Company give SAA preferential treatment.

The result has been that whereas Telkom continues to exist in a highly protected and monopolistic environment, SAA has been exposed to tough international competition. This has been extremely beneficial to passengers - but disastrous for SAA. At just the point when it was undergoing 'transformation' (and Louise Tager's Transnet management) it has been sideswiped by competition and is in a parlous state.

There is almost no such thing as an SAA flight which now leaves on time and the booking system is increasingly fallible. In addition, a wounding strike by technicians last year saw many competent people leave and word has it that aircraft turnaround times have increased from eight to as much as 30 hours. Cabin staff are sometimes so poorly trained that pilots have sometimes had to seat passengers themselves, and so on.

Many companies are now insisting that executives with early morning appointments in other cities fly there the previous evening, preferring to increase their hotel bills because it is impossible to rely on the punctuality of SAA morning flights. Not surprisingly, SAA is leaking money like a sieve, with losses for the year now forecast at R345 million. It is, in a word, becoming urgent for government to get this unhappy beast off its hands.

Making it clear to the foreign airlines who are the would-be buyers that they will be able to take complete management control of SAA rather than be satisfied with a 30% stake, will certainly make such a deal more attractive. But will it be enough? Mrs Thatcher found that to privatise successfully one generally needed to 'slim down' state enterprises ready for the market: no one is eager to buy a loss maker.

This, indeed, is believed to be the burden of a recent Warburg's report to the government on the subject. But one only has to look at the utter butchery inflicted on US airlines by such takeover kings as Frank Lorenzo and Carl Icahn to see that this process could be very messy indeed. In the US it meant wholesale sackings, the halving of pilots' salaries and much more of the same ilk: radical surgery here would almost certainly involve the reversal of affirmative action and other 'transformation' measures. The Transnet director for SAA, Zukile Nomvete, has vowed to be 'ruthless' in restoring profitability but is he really willing to go that far?