It is always best to assume, after a break from any activity, that not much has changed, and certainly not the nature of people
IT IS always best to assume, after a break from any activity, that not much has changed, and certainly not the nature of people. The start to the South African year looks pretty much like all those years before. Schoolchildren have no textbooks, and the matric results were yet another national disgrace. The average maths mark was 29%. More people died in holiday traffic than the year before, though in fewer accidents (which implies vehicles on our roads have become even more overcrowded).
On the political front, the government and its ruling party, the African National Congress (ANC), remain as fractured as ever under the dual leadership of President Jacob Zuma . As this is a (party) election year for him, expect him to do very little beyond clearing the Julius Malema threat out of the way.
But while he flounders, his Cabinet continues to mess around. I won’t say much about the plethora of plans floating about, each with its own minister-champion, but it is good to welcome a new player on the rich field of future ANC economic plans. It is Malusi Gigaba , public enterprises minister and an all-round good fellow.
Gigaba is an implacable believer in the state sitting at the commanding heights of the economy, herding the private sector to where he feels it can help. He was being quoted in the Sunday Times yesterday as saying he wants to agglomerate all the government’s businesses in one department. His. So in addition to Transnet, South African Airways, Denel, Eskom and the like, he’d also like the Post Office (it is growing itself a bank, which might be useful), the SABC possibly and the Industrial Development Corporation (IDC).
All of which not only immediately puts him at odds with colleague ministers already running the IDC and the Post Office or the Public Investment Corporation, thus adding to the complexity surrounding Zuma, it also further signals the degree to which the government is misinterpreting the financial crisis.
While there was almost joy at the collapse of Lehmann Brothers in 2007 in some quarters of the ANC, who saw in it some sort of proof of the structural collapse of capitalism and a good moment to flex the muscle of the state, the subsequent collapse of the economies of countries such as Greece, Ireland, Spain and Italy is being ignored. It is an inconvenient fact for corporatists in the Zuma Cabinet that what is happening in Western Europe is a state crisis, not a capitalist one.
We’re too mature an economy to delude ourselves that we are a budding China or Brazil and the money now being thrown by the government at the public sector is downright dangerous. So out of balance have things become that the state accounted for 80% of the jobs created last year and public-sector employees now earn, on average, about 45% more than private-sector workers.
Worse, by some calculations it is possible to argue that most public-sector workers earn more, on average, than do most South African entrepreneurs.
South African companies, sitting on mountains of cash, watch this with growing bewilderment. They are being crowded out, or, like the mining industry, are being drowned in regulation. Meanwhile, the costs of doing business here are rising, not falling.
It is simply not possible for the state to continue growing, and overpaying, like this without creating for itself a debt trap of Mediterranean proportions.
(PETER BRUCE: BussinessDay)
