THE BIG READ: The not so shiny story
You might think that the Gupta scandal, which has dominated the public discourse over the last month and which was the subject of an exchange of rhetoric in parliament this week, is the single biggest issue facing South Africa.
It is certainly the most interesting, involving as it does billionaires, Sun City, a wedding, a diplomatic scandal and a rigged blue-light brigade. And it is important because the nation is contemplating just how much influence the president's business benefactors should have over the state.
But there is a far less glamorous story with larger consequences playing itself out on the screens of stock traders, in telephone calls between the captains of high finance and government, and in the corner of South Africa named "the platinum belt" when that was still a shiny notion.
The story is that of the plummeting rand and the absence of weapons with which to halt its slide. The fact is that South Africa has a growing current account deficit - more money is moving out of the country than is coming in by a substantial margin.
What is concerning is the continuous downward trend and the rapid weakening of the rand.
Some of this is due to factors that lie beyond South Africa's control.
The latest language from the US Federal Reserve suggests the "tailing off" of "quantitative easing" - the printing of money to stimulate the US economy. This talk is strengthening the dollar and there is simply nothing that economies the size of South Africa's can do about it.
The effect on South Africa of this change of stance by the Federal Reserve - and on other emerging markets - is considerable. The trade deficit was being funded by bond inflows. Now these inflows are drying up as US and European bonds again become more attractive than ours.
But not all factors are beyond South Africa's control. Our risk premium is in our hands.
This week NUM tabled a demand for a 60% rise in wages for miners. The effect has been to substantially weaken our standing in the eyes of investors.
What looms is labour unrest, higher costs for the mines, and the closing of marginal shafts - all of which will result in lower gold production. That no longer has the impact it once did on GDP but it will damage our exports. And that means more trouble for the current account deficit and a weakening rand. The problem we face is that we can no longer offer a credible face to the world when it comes to political risk.
Last year the Marikana killings shocked the world. The government reacted by establishing a commission of inquiry, as if this would somehow magically plug the massive hole in the centre of our collective bargaining system. It didn't. Instead, like all commissions of inquiry, it seems set to drag on until some distant time when its findings will no longer be of any use. A commission of inquiry is a poor substitute for leadership.
But the government appears unable to provide leadership. The primary reason for this is simple: its leaders are involved in a struggle to retain their positions, to clamber over others to larger positions, or to shaft others from their positions.
Key to this king-making process is labour federation Cosatu, which has cannily used its part in President Jacob Zuma's ascendency to become the most coherent force in politics.
The ANC's leaders believe that they cannot survive in politics without paying their respects to Cosatu. The result is that Cosatu has come to play a leading role in determining policy. As has been pointed out by Alistair Sparks, in Business Day, it has demonstrated its veto power over the youth wage subsidy and is presently mounting an effective assault on the National Development Plan. Zuma has yet to show that he stands by the plan .
Cosatu's policy lobbying is becoming destructive. But what is far more concerning is the fact that it is under attack by populist competitors that are dangling the chimera of rapidly growing wages before workers. The announcement by NUM, one of Cosatu's core affiliates, that it wants a 60% wage increase on the mines suggests that Cosatu is succumbing to this new brand of populist unionism. This is a recipe for conflict because it is not possible for business to award such increases without going out of business.
The government's inability to restore sanity to the labour market is going to multiply the perceived risk of investing in South Africa at a time when the rand is under pressure by forces beyond our control. What looms is a perfect storm of Bollywood proportions.