GILL MARCUS APPOINTED SOUTH AFRICAN RESERVE BANK GOVERNOR

UNCLAS PRETORIA 001499


DEPT FOR AF/S; AF/EPS; EB/TPP
USDOC FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND
TREASURY FOR DAN PETERS
DEPT PASS USTR FOR WILLIAM JACKSON

E.O. 12958: N/A
TAGS: ECON EFIN EINV EMIN ENRG ETRD BEXP KTDB SF
SUBJECT: GILL MARCUS APPOINTED SOUTH AFRICAN RESERVE BANK GOVERNOR


1. Summary. South African President JACOB ZUMA announced the
appointment of ABSA Group Non-Executive Chairperson Gill Marcus as
South African Reserve Bank (SARB) Governor on July 19, 2009. Born in
1949 to African National Congress (ANC) activist parents, Marcus
went into exile in 1970 and joined the ANC's Department of
Information in London. She returned from exile in 1990 and was
elected to the ANC's National Executive Committee in 1991, and to
Parliament in 1994. Marcus served as Deputy Finance Minister from
1996 to 1999, and as Deputy SARB Governor from 1999 to 2004. Since
2004, she has held various senior positions in the private sector.
Politicians and the business community welcomed her appointment.
End Summary.

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Marcus Appointed SARB Governor
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2. (U) South African President JACOB ZUMA announced on July 19 that
Gill Marcus will take over from Tito Mboweni as Governor of the
South African Reserve Bank (SARB). Mboweni, whose current contract
expires on August 8 after two five-year terms, will remain at the
helm of SARB until Marcus takes over on November 9, 2009. Marcus
will be the first woman to hold the position of SARB Governor. Her
appointment came after months of speculation that Mboweni's contract
would not be renewed after public rows with trade union leaders over
monetary policy. President ZUMA said at the press conference that
Marcus had "qualities of proven leadership, sound judgment and
integrity." He added, "She will prove a worthy successor to Mr.
Mboweni".

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Background
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3. (U) Marcus was born in Johannesburg in 1949 to ANC activist
parents. In 1970, while studying for a business degree at Wits
University, she left the country with her family. Marcus switched
majors to industrial psychology and finished her degree in London,
while doing volunteer work for the ANC's London office. From 1975
she worked full time for the ANC's Department of Information in
London, where she was the editor of the ANC's weekly bulletin, which
was distributed at the United Nations and to parliamentarians in
Britain and Europe. According to Trevor Manuel's biographer Pippa
Green, Marcus became a significant voice of the ANC in London, so
much so that undercover South African police agents planted a bomb
in her office in 1982. The bomb went off, but Marcus was not at the
office that day.


4. (U) In 1990, Marcus returned from exile to set up the ANC's
information department. She was elected to the ANC's National
Executive Committee in 1991, and served on the national working
committee. Before the 1994 elections, she trained ANC media workers
and voter educators, and accompanied Nelson Mandela on his election
campaign in the provinces. Marcus played a leading role in
determining media policies for the ANC in the run up to the 1994
elections.


5. (U) After the 1994 election, she was chosen for parliament and
quickly established a reputation for efficiency as chairperson of
the parliamentary joint finance committee. She held this position
from June 1994 until June 1996, when she was appointed Deputy
Minister of Finance. As Deputy Minister from 1996 to 1999, she
worked closely with Finance Minister Trevor Manuel. She served as
SARB's Deputy Governor from 1999 to 2004. Since 2004, Marcus has
served as Director of the Gordon Institute of Business Science,
Non-Executive Director of Bidvest, Executive Chairperson of Western
Areas (a mining company),and Non-Executive Director of Gold Fields
(also a mining company). She has held her current position as ABSA
Group Non-Executive Chairperson since 2007.

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Monetary Policy Changes
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6. (SBU) Marcus side-stepped questions by journalists on the future
of inflation targeting, saying only that "down the line we will have
many debates." An ABSA economist told Embassy Economic Specialist
that Marcus is "not likely to favor any changes to inflation
targeting, given her involvement in the debates around the current
policy during her tenure as Deputy Finance Minister and Deputy SARB
Governor." In a media briefing after the announcement of Marcus's
appointment, ANC Secretary General Gwede Mantashe said that Marcus
will implement the policies she finds in place at the SARB.
Mantashe mentioned that while "any change presents an opportunity,"
policy was not a function of an individual. He stressed that policy
changes, if any, would take a long time and that "individual tastes"
would not be a factor. [Note: The SARB receives its mandate from
the Finance Ministry and is, therefore, only tasked with policy
implementation. The Finance Ministry will have the final word on
inflation-targeting. End Note]

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Local Reaction
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7. (SBU) The local reaction to Marcus' appointment has been
overwhelmingly positive, with business groups as well as the
Congress of South African Trade Unions (COSATU) and the South
African Communist Party (SACP) all applauding the appointment.
Economic analysts were equally enthusiastic. A Democratic Alliance
economist told Deputy Economic Counselor, "Marcus has the potential
to have a very good impact on the image of the SARB." [A reference
to Mboweni's reputation for high-handedness.] In a note for
investors, Standard Bank said that Marcus would "reconcile multiple
stakeholders" with different interests. COSATU said it hoped that
Marcus' appointment "will mark a change of policy by the SARB to one
more geared to economic growth rather than a rigid obsession with
inflation targeting." Investec Asset Management Strategist Michael
Power wrote in a press article, "Marcus will bring to the Pretoria
table during her governorship a willingness to entertain new ideas."
ANC spokeswoman Jessie Duarte told journalists that Marcus enjoyed
the confidence of all sectors, especially the financial
institutions. There is general agreement that Marcus is
intelligent, hardworking and honest.

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Comment
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8. (SBU) ZUMA made a shrewd move by appointing Marcus. Unions are
pleased that Mboweni will leave SARB, while business can reasonably
expect that few policies will change under Marcus. Zuma's selection
of Marcus was a choice for competence and continuity and shows that
the ANC understand the importance of monetary policy. Given
Mantashe's comments on monetary policy, as well as Marcus'
appointment, post does not expect any significant changes to
monetary policy in the near term.