While Oscar enthralled, here is what SA missed

26 February 2013 - 02:35 By David Shapiro

After a week of drama that came close to shifting the earth's tectonic plates, I couldn't wait for the weekend, though I had little time to put up my feet and read Archie comics because of a number of corporate junkets planned around tomorrow's budget.

I relax by catching up on TV sport, but I'm reaching the conclusion that watching highly paid rugby and soccer players battling for hours on end, or witnessing our cricketers clubbing their opposition into submission, is becoming a mind-numbing experience.

I attempted to distance myself from the bitter social debates around our Oscar-winning performance, knowing full well if I heard a disturbance in my house in the dead of night I would wake my wife and urge her to investigate. Still, as a parent, my heartfelt sympathies rest with Reeva Steenkamp's family. Putting aside the possible outcome of the murder trial, they will spend the rest of their days trying to come to terms with the loss of their beautiful and vivacious daughter and sister who was taken in the prime of her life under mysterious circumstances. Even if Oscar Pistorius's counsel is sharp enough to win his freedom, he will never regain his celebrity status. Sponsors will shy away from his tainted brand, and many in the stands will persistently question his innocence.

When South Africa was preoccupied with Pistorius's bail application, bigger stories were unfolding that could have a far more dramatic effect on our future prosperity than the Paralympian's fate. The gold price continued to slide - it's down nearly 6% since the beginning of February and way off its recent highs - after investors chose to abandon the metal as a safe-haven hedge in favour of higher yielding equity investments on the premise that improving economic data in the US and China would drive a far-reaching global recovery.

Gold might not be considered as crucial to our economic wellbeing as it was 50 years ago, but the industry remains an important employer and key support to a number of related manufacturing and service businesses. More disturbing, though, was an associated $100 plunge in the platinum price - a move that compounds the troubles facing a part of the economy so critical for the success of the government's development plans.

The fall in those important metal prices sparked an alarming sell-off in mining shares on global markets, including the JSE. It wasn't only precious metal counters that were ditched, however - the battering encompassed a far broader base of resource stocks.

Recent earnings numbers and a series of high-profile resignations at top mining corporations are now raising doubts about claims that the Chinese-inspired, super-cycle in commodity prices is still intact. Rising input costs, brutal impairments and slackening demand are swaying analysts to downplay future revenue projections.

It's apparent from President Jacob Zuma's State of the Nation speech that the country's economic and tax policy is being shaped around an extended demand for an array of commodities we produce. But now that conditions in the market are beginning to resemble nothing more than a standard cycle, we could conceivably fall into the same trap that cost the free-spending heads of some of the world's largest mining companies their prominent positions.

Adding to the market's worries last week were rumblings from certain Federal Reserve governors that the liquidity created by their prolonged accommodative monetary policies was flowing into risky investments, among them the stock market, heightening the risk of an asset bubble. A mere discussion of possibly scaling down the Fed's stimulus plans at a time when the global economy is starting to show tentative signs of recovering is enough to cause jitters on world exchanges. But with chairman Ben Bernanke committed to maintaining his programmes, at least until the unemployment rate drops to 6.5% from its current level of 7.9%, the fears appear unfounded.

The week wasn't without its high points. Medical doctor, academic and businesswoman Mamphela Ramphele announced she would contest the 2014 election.

Ramphele has demonstrated courage that few of her former activist colleagues have displayed, confessing that the dreams promised when the ANC took over the running of the country in April 1994 have faded. The present government's failure to advocate decent standards of governance has led to a loss of moral authority and international respect.

Critics have questioned her motives and grasp of workers' demands and dispute her ability to attract wide-scale support among the masses. Nevertheless, neither the government nor labour unions create jobs in an economy - it is business people who feel secure and confident enough to invest their capital, skills and time. At long last, there is someone credible who, perhaps, can offer a path towards that.