SAA crashes while Ethiopian Airways soars, but Cyril just blathers on

SAA crashes while Ethiopian Airways soars, but Cyril just blathers on

On Monday in London – at separate venues – two heads of state were in action delivering speeches to different audiences in the same city, but their rhetoric was joined by a common incredulity, even cynicism, on whether hard deeds will follow fine words.

The speech that grabbed the headlines, helped by the majestic backdrop and the appropriate flummery and pomp and circumstance which accompanies her, was Queen Elizabeth’s speech to the opening of the British parliament. Of course, it is not “her” speech, in the sense that the titular head of the British state does not write, or even necessarily believe, a single word of the text that the nonagenarian monarch reads out. It is written for her by Her Majesty’s Government, in this instance the hard-charging regime headed by Boris Johnson.

The kindest words on her performance on Monday came from the press pillar of her establishment, The Times, which encased its admiration for the messenger with deep cynicism for the contents of the message.

“Indeed there was something unseemly about the sight of the 93-year old monarch, who has recently found herself after 70 years of public service being drawn into political controversy by the antics of her current and former prime ministers (Johnson and Theresa May), being obliged to read out what amounted to a Conservative election manifesto.”

And Johnson himself, who whatever his failings as head of government compensates with his prowess as a wordsmith, announced that the welter of 26 draft bills in the text – from trade and health to policing – would “unleash the chutzpah of the UK … get the gears of our national gearbox working again”.

But of course the sand in the gearbox here is the great unknowable of Britain’s departure from the European Union (EU), which on Johnson’s own “die in the ditch” timetable needs to occur within 16 days, even though no agreement for the terms of the exit have been reached with the Europeans. Added to the complexity, or unreality, of the British government’s planned agenda is that the ruling party is 40 seats short of a majority, and the one power that the prime minister traditionally held, the ability to call a snap general election, is no longer in his hands.

The consequence of the Fixed Term Parliaments Act now means that the legislature has to approve a decision to dissolve parliament, and the highest court in the land recently ruled that Johnson’s other device, simply suspending or proroguing parliament to push through with a deal, is unlawful.

Boxed in on all sides, by his parliament, by the EU, by the hardline timetable for Brexit he imposed, the British prime minister’s room to manoeuvre is startlingly slight.

At some point, but no one knows when and with what result, Britain will leave the EU and will elect a new government, though not necessarily in that order. And the Palace of Westminster, the so-called Mother of Parliaments, has birthed unprecedented disorder and irresolution, in a place and country once correctly admired for its legislative efficiency and democratic decorum.

A short distance from parliament on the same day, at the stately Claridge’s Hotel in swish Mayfair, SA’s president, Cyril Ramaphosa, was the keynote speaker at the Financial Times Africa Summit.

If the Queen’s Speech was a case of mood music designed to calm a restive audience, Ramaphosa’s effort, with one dramatic exception, was more a case of muzak, the sort of background tune you hear in a shopping centre, which neither offends nor sets the pulse or the heart racing with a sense of excitement.

The exception was, of course, his quantification of state capture, much spoken of but never yet quantified by the head of state at least. He told the conference: “It is much bigger than I think most people could ever have imagined. (The cost) runs way beyond, in my view, more than R500bn. Some people have even suggested that it could be a trillion rand”, Ramaphosa advised his audience.

On that range, the plunder of the state ranges between 10% and 20% of the entire economic activity, or GDP, of the country. And as the Financial Times factored in, analysts have estimated that more than R1-trillion was indirectly lost to the country during the Zuma decade through uncollected taxes and lack of investment.

While this remark at least had the benefit of candour and manning up to the huge hole in the country’s credibility and fiscus, the rest of the speech was essentially a combination of warmed-up old announcements and kicking for touch on new initiatives. Visa reform, integrated resources plan, Africa Free Trade Agreement, broadband spectrum access, Eskom restructuring and monthly meetings with business and unions et al, have all been announced, half implemented or not, await future resolution or can-kicking down the road.

He did not lash himself or his government to, for example, Tito Mboweni’s plan, and while he indicated willingness, or desperate need, for private-sector participation in state-owned companies, he ducked the essential question of simply letting go of state-owned dinosaur or zombie companies.

Stuart Theobold, writing in Business Day on the same day this week, provided an eloquent and devastating analysis of the unhappy fate of previous private-sector participants in SOEs.

He wrote: “The problem is that the idea – giving outside investors a minority stake in return for their capital and expertise – isn’t going to fly. There is no sucker unwise enough to take such a deal, especially given the government’s history of abusing minority shareholders.”

Telkom succeeded as a standalone former state-controlled company, making a fat profit with minority government share and no management interference. SAA and ACSA are at the opposite end of the spectrum – their minority private-sector shareholders having either exited completely or become enmeshed in litigation with the government over unmet promises.

Now it is suggested that SAA is in discussion with world-class Ethiopian Airlines for some sort of partnership.

The irony here is that both airlines are state-owned. But other than flying to and from the same continent, that is where the similarities end.

In the past five years, Ethiopian has doubled the number of its passengers, and increased its profits five-fold. SAA, by contrast, has lost nearly 300,000 passengers and posted losses of more than R12bn over six years.

Ethiopian has now become the largest air carrier to Africa and grown its seat capacity by 177.7% in six years.

These fascinating metrics were provided by Andrew Barlow, a researcher at the Helen Suzman Foundation, supplemented by comment from Business Insider SA (June 9 2018). The key to Ethiopian’s success, according to the review, is: “Though state-owned, Ethiopian Airlines is first and foremost a business … it hires professionals not politicians.”

Much of our current local debate is locked in a sterile binary between state and private ownerships. In fact, if Ramaphosa in London on Monday had simply added that one commitment – “we will let the business leaders take the lead in all business, state or private” – background music would have risen to symphonic levels.

Leon, a former leader of the opposition, now chairs Resolve Communications.
@TonyLeonSA.

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By |2019-10-16T07:20:16+00:00October 16th, 2019|Boris Johnson, Cyril Ramaphosa, SAA|0 Comments

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