Rules must apply to all

SOUTH AFRICA PRESENTS a perplexing picture as far as investor confidence is concerned. If a country's image could be called "schizophrenic", then ours would raise some psychiatric concern. At one and the same time, South Africa is justifiably praised for its national reconciliation, Constitution and its macroeconomic policies; warned sympathetically about its business operating costs, skills base, race relations and labour market; and deplored for its criminal violence, Aids pandemic and latterly for signs of corruption in high places. To its credit the government is not only aware of the situation but is trying increasingly hard to send all the right messages.

For foreign direct investors, however, the issue of the critical mass of co-operation and trust, in other words the prospects for continuing political stability, underpins their final decision. It may not be captured in the specific ratings and rankings, but the longer-run governability of the society, and with it the security of property rights, are unfortunately not settled issues in South Africa. Some countries with a centre of gravity of reasonable trust and co-operation can tolerate a considerable amount of civil disobedience. In others, including South Africa, where the critical mass of co-operation and trust is in question, civil disobedience can arouse deep fears of social and political fragmentation.

That is the warning broadcast by the phenomenon of urban land invasions, which Lawrence Schlemmer discusses on page 10. Land invasions loom large in the minds of investors not because they think that the strategies of Mugabe's farm invaders will cross the Limpopo, but because they have begun to doubt the capacity of government to enforce any reasonable rules outside of the more visible, and hence controllable, middle classes. Crime control is not just about crime. The lack of crime control magnifies so many other problems that it is the core issue in investor confidence. Effective policing is our only route to that critical mass of voluntary compliance with law that our economy needs most.

Evicting illegal invaders and determinedly bringing to book not just crooked local politicians who are involved, but more widely rates defaulters and housing queue jumpers, is essential. Such firm action will be critically undermined, however, if the public continues to see those at the top using their positions for self-enrichment with impunity.

After months of allegations in the media about the R43.8 billion arms procurement deal and associated corruption and conflicts of interest of some government personnel involved, President Thabo Mbeki has admitted that stricter controls on the conduct of senior officials and cabinet ministers are necessary. He said pointedly that cabinet ministers who leave office should not benefit from government contracts in the same field as their former portfolios. Though he did not name him, Mbeki's disapproval was a clear reference to stories about the unexplained conduct of former defence minister Joe Modise, explored on the next page by Patrick Laurence. The new rules may require officials having to sign special contracts during a negotiation process and the disclosure of financial interests by public servants from the level of departmental director upwards.

This welcome new thrust against abuse of public office follows on numerous presidential statements that the government was tackling corruption and that it would use the sternest possible measures to do so. So far not much has happened and the public can be justifiably sceptical as to whether these new rules will be rigorously enforced. Tony Yengeni, the ANC's chief whip, is still attending ANC national executive committee meetings with Mbeki and other members of the ANC aristocracy, with an air of angelic innocence. He has yet to explain how he acquired a heavily discounted Mercedes-Benz 4x4 from the head of a company connected to one of the arms deal contracts and why he did not disclose it to Parliament. Significantly, discontent with the situation has been growing among rank-and-file ANC members and the trade union and communist party sections of the tripartite alliance.

The ritual sacrifice of a couple of high-profile scapegoats will not suffice, however. What happens at the top sets the tone for the whole society. As Democratic Alliance leader Tony Leon has written: "How do you tell poor people to stop helping themselves to land and houses when the people in power are helping themselves to luxury cars and lucrative business contracts?" A crackdown on corruption and rule-breaking among national and provincial leaders would reverberate through the public service and the private sector. The man and woman in the street would soon get the message - and so would the foreign investor.