Letters: High cost of our deal with China

The government sold many industries and jobs down the river when it signed a trade agreement with China that did not restrict the mass import of the type of goods that were already made locally.

I have watched the struggle and eventual closure of many local manufacturers that could not compete with the cheap prices of goods imported from non-unionised countries such as China, India and Pakistan.

First to go were the makers of leather bags, wallets and purses, followed by our shoe industry, which moved its manufacturing to China. Next to go was the textile industry - mills that employed many thousands of workers - that could not compete with imported low-cost fabrics.

The result is that millions of rands of infrastructure was laid to ruin, with hundreds of thousands of jobs lost. For every shirt or pair of shoes we wear, we are most likely feeding a foreigner while our own people live off meagre earnings or social grants.

The government must now halt the importation of furniture so we can save that industry, and stop the unnecessary imports of cheap Chinese car parts such as air and fuel filters. Even if it costs us more, we must restore as many manufacturing opportunities as possible to help create jobs.- Alan Palmer

Molefe blamed for being a crusader

The article "Savvy big wheel at Transnet", (February 20) on Brian Molefe's appointment as head of Transnet, gives him some credit for growing the Public Investment Corporation (PIC) fund from R300-billion to over R800-billion. But the greater part of the article seems designed to paint a picture of a man predisposed to poor judgment in corporate governance.

Is this the price Molefe must pay for the courageous crusades he ran - using the muscle of the billions of pension funds of black labour on his side - to make white business sit up and listen to the transformation agenda? Was his crime to lead the way in demonstrating shareholder activism in a manner that was received with contempt by those who saw him as the only black at the dinner table not abiding by the table manners his master was expecting of him? - Sipho Malefane, Hartbeespoort

Deficit is bad news for consumers

The budget deficit will have a seriously negative impact on consumers, companies and the economy. The government is forced to borrow funds from the market in order to finance this deficit. Such financing will increase the market's interest rate - which will in turn decrease the quantity of funds demanded by households and companies for consumption and investment, as the cost of borrowing money will be very high.

Higher interest rates also choke off borrowing by households to finance the acquisition of durable goods, as well as homes and cars. High rates encourage saving, thereby decreasing private consumption - and so reduce job opportunities and private investment.

The longer it takes the government to reduce the deficit, the more difficult it will be for it to realise its job creation plans. - Musa C Mkhabela, Sunnyside

Don't be pig-headed about iron

Why do we export raw iron instead of treating it and exporting it as pig iron? The beneficiation process would create employment; transporting it to Richards Bay would require fewer railway trucks; and fewer ships would be needed to take it overseas, saving diesel. - J Bachmann, Sandringham

Law of supply and demand rules

When are unions going to realise that they are shooting themselves and our country in the foot? There is no objection to people earning a fair wage for a fair day's work, but there could also be little argument against the following:

The law of supply and demand governs wages just as it does prices, and the unions would be the first to push for greater competition to keep prices down. Thus when, say, mealies are plentiful, prices tend to be low. Just so when there is an oversupply of labour, wages tend to be lower.

By demanding wage rates outside of the simple economic principles set out above, inflation is stimulated and within a short period prices have risen to the extent that the higher wages revert to the same purchasing power generated before the increase.

Efficient workers will be able to command a high demand for the service and accordingly will justify a higher rate of pay - the only justifiable reason for such an increased level.

Simply raising wage rates across the board tends to drive potential employers out of business, thus impeding competition and limiting job creation. Excessive employment legislation has the same effect. - Tony Versfeld, Port Alfred