Before you cast those votes, think about SA's future - Times LIVE
Sun Apr 30 16:39:35 SAST 2017

Before you cast those votes, think about SA's future

David Shapiro | 2012-12-04 00:06:14.0

I have become the proverbial frog in the pot. If you put a frog in a pot of boiling water, it dies. If, however, you put the frog in when the water is cold and turn up the heat slowly, it adapts and survives.

While running around my neighbourhood in Johannesburg at the weekend I passed the remains of a burnt-out bakkie resting on its rims on the pavement at the bottom of Glen Road, Bramley. Attached to the front door was a crudely painted sign informing any predatory scrap merchants that the wreck was not for sale. Further up the road, foul-smelling effluent was gushing from a drain. Outside the shops on Jeunesse Road, broken beer bottles and lorry loads of discarded packaging littered the gutters. At the corner of High Road and Corlett Drive, two traffic lights leaned at 45 degrees.

All along my route, there were missing manhole covers posing a danger to pedestrians; rain water, seeping through neglected fractures in the tarmac, had eroded the undersurface, creating potholes.

Strangely, hardly anything bothered me. I have grown accustomed to deteriorating municipal service and the squalor of a nation that demonstrates little pride in its surroundings. I continued my run untroubled, deliberating on recent business news.

But, as Gold Fields CEO Nick Holland warned investors when he presented the group's quarterly results last week, if what's happened in the last five years continues unchecked, there will be no gold mining industry in five years. Pressure from foreign shareholders has forced Gold Fields to jettison its older, deep level and less competitive South African operations into a separate company, allowing management to focus its attention on the group's lower risk, international mines, as well as on the fully mechanised South Deep mine, which is near Johannesburg.

Calls for nationalisation, unlawful strike action and cost increases have turned investors away from South Africa's gold mining industry, leaving locally listed shares trading at wide discounts to those of their international peers.

Reserve Bank governor Gill Marcus was not subtle about South Africa's mining future when she spoke at a gathering of the National Union of Metalworkers of SA in Randburg last week. She referred to the decline in our third-quarter GDP as "self-inflicted".

Against the backdrop of a dazzling banner glorifying worker power, she highlighted the perils the slowdown in global business activity - something that could persist for a few more years - posed to the economy. She fired a broadside at the crowd, cautioning them that excessive wage settlements - not matched by an equivalent increase in productivity - would end in job losses.

Our future is inextricably linked to the success and growth of our major trading partners abroad and, as long as the world economy faces risks, demand for our goods and services will suffer.

But it is not only concerns about the future of our mining and manufacturing industries that have spurred leading names in business to press the red alert button.

In a recent interview with Moneyweb, Naspers CEO Koos Bekker admitted that South Africa is lagging behind the rest of the world when it comes to e-commerce. In Great Britain, for example, online shopping makes up 10% of total retail sales compared with a paltry 1% here. Sadly, even Nigeria and Kenya are surging ahead of us. Bekker blamed the government, which acts as both a regulator and service provider through its majority stake in Telkom, for our tardiness.

Regrettably, policy is skewed towards maintaining Telkom's position in the market place at the cost of competition. The upshot is that South Africa trails other countries in internet services - to the detriment of the nation's growth and development.

Everyone's concerns about the outcome of the recent unlawful strikes and the country's sliding competitiveness are beginning to reflect in the numbers. South Africa's third- quarter GDP slumped to 1.2%, which is well below analysts' projections. That figure has prompted the Reserve Bank to reduce its growth forecasts for next year to 2.9%.

More distressing, though, were Friday's trade numbers, which showed that sagging exports had pushed our deficit for the past 10 months to more than R100-billion - 10 times higher than for the whole of last year.

That means we are importing R100-billion worth of products more than we are exporting, a shortfall that has to be covered by foreigners who are willing to invest in our country.

How long they continue to keep that up will depend largely on an upbeat outlook for our economic prospects, and belief in our political and social stability.

All the ANC bigwigs should bear that in mind when they assemble in Mangaung to decide on who should lead the party.

Instead of the usual ululating, back-slapping and lengthy sermonising, they should reflect on falling business confidence and the country's diminishing international image before they vote.


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