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Thu Jun 20 03:05:51 SAST 2013

SA is travelling on a fast train to economic woe

David Shapiro | 19 June, 2012 00:03

I am loath to admit I have never ridden on the Gautrain. My wife, Linda, though, travels no other way to the airport. But she's the kind of person who catches the underground from Heathrow, heaves her bags up the steep steps at Green Park Station and then hauls her luggage the few blocks to a hotel in Curzon Street.

Once she dozed off failing to notice that, at one of the stops, her Samsonite Spinner had rolled out of the open doors of the carriage onto the platform. Luckily a fast reacting fellow traveller managed to alert her seconds before the train left the station.

After regular trips to and from OR Tambo International Airport over the past few weeks, I am ready to accept my wife's tiresome appeals to use the Gautrain. Rarely did I encounter a trouble-free run on the highway, the congestion in most cases the result of pile-ups caused by reckless and irresponsible truck drivers.

Edging home at a snail's pace from the airport on Friday - the 20km trip took longer than my flight from Port Elizabeth - I was attracted to a large billboard overlooking the R24 off Edenvale Road that featured a beaming President Jacob Zuma, surrounded by members of his cabinet, calling for all South Africans to work together.

His appeal for unity of purpose made me grin and reflect on the controversial but entertaining Nando's advert that ridicules local attitudes towards outsiders. The spoof suggests that all foreigners, from the Cameroonians to the Congolese, the Europeans to the Chinese, should head back whence they came - they all disappear in a puff of smoke when mentioned by ethnic group. Nando's, never shy of poking fun at the absurdity of domestic politics, wraps up, though, believing that real South Africans love diversity, and in acknowledgment of the multiplicity of cultures that frame this nation the food chain has introduced two new product lines.

Yet there is a stinging legitimacy in the comical commercial, one that is undermining our capacity to move forward and one that, despite the president's pleas to the contrary, the ruling junta has displayed little urgency to apply.

The South African economy is at the crossroads, functioning well below its optimal level, largely the upshot of the global financial crisis but also the outcome of operational inefficiencies in both our public and private sectors.

The cost of production on our mines and in our factories is increasing rapidly, making the goods we sell to the rest of the world uncompetitive. Much of the wastefulness, thievery and ineptitude in the economy are clearly attributed to partiality in the country's regulatory framework together with a distinct bias in the award of government business to the ruling party's faithful.

Anglo American Platinum's and Aquarius Platinum's recent announcement that they were closing their jointly owned Marikana mine is a sober reminder of the many obstacles facing our economy. Marikana is a small producer that was operating at a loss. Weak industrial demand and fears over the outlook for global growth have pushed the platinum price lower, putting pressure on a number of high-cost projects. Admittedly the platinum market is in surplus and removing excess supply should help stabilise prices in the longer term.

Platinum is South Africa's biggest mineral export (followed by coal and gold) and a major contributor to the country's GDP. Its foreign exchange earnings allow us to purchase commodities (like oil) and goods (like computers and machinery) not produced locally while the taxation on producers' profits provides the Treasury with the resources to maintain our infrastructure, defend our borders and pay social grants to our underprivileged.

Closing a mine (or any business for that matter) goes beyond reducing foreign exchange earnings or taxation; it halts all economic activity linked with its operation. Manufacturers supplying explosives for blasting ore or chemicals for the reduction plant suffer the loss of a customer while worker dismissals bring hardship to the community, affecting everyone from the chemist to the hairdresser.

The slowdown in the world economy is not only hurting the marginal ventures. Even the larger producers are battling to make ends meet. The market price of platinum is beyond our control but operating costs are not.

Unwarranted safety stoppages, escalating administrative charges, unnecessary strike action, undue wage demands and poor governance are threatening the industry's future and the many businesses and services associated with the mines and their immediate communities.

Next time I'm stuck in traffic driving home on the R24, instead of a smiling President Zuma in a hard hat standing in front of a construction site, I'd like to see a graphic of the president seated at his stinkwood desk surrounded by his minister of mines, the trade union bosses and mining management drinking a toast to future collaboration and teamwork. Sadly, it is not going to happen because, from now on, I'm taking the Gautrain.

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