Amid the chaos of last week’s state of the address, President Zuma rehashed old ideas that will do more harm than good to SA

 19 Feb 2015 | Tony Leon | Original Publication:  Rand Daily Mail

Look beyond, if you can, the violent distractions on display in Parliament last week. Ignore even the curious head-dress borrowed, it seems, from Hiawatha’s cupboard, of Chief Mangosuthu Buthelezi. Even the laugh, or rictus, of our president will fade over time.

Drill down into the content of President Jacob Zuma’s speech and you get a glimpse of the future, even though much of its language and imagery came from the past. There are parts of it which create much foreboding and which should cause as much concern about our economic prospects going forward as the din and clamour inside and outside Parliament last Thursday suggested about the failing health of our democracy.

Speaker Baleka Mbete should know that “cockroaches” are well-nigh indestructible, having been recorded as even surviving nuclear fallout. Zuma must equally know that even when regents thought they had divine gifts, King Canute could not turn back the tide. In modern economies in the tough, take-no-prisoners world in which we operate, and where real jobs are created and currencies pummelled, there is no room for wishful thinking or untested or, worse, disproved policies.

Yet buried in the text and the laundry list of measures outlined by Zuma last week we had plenty of what Gabriel García Márquez called “magical realism” on display.

Strangely, Zuma got bashed by the estimable Financial Mail when, in his charm offensive in Pretoria with journalists days before his speech, he was heard to complain that “technology was costing jobs”. Never mind the fact that this is part of the parcel of blaming external conditions for the local state of our affairs; there is a profound truth in what Zuma articulated.

We live today in an “Uber on-demand economy”. Harvard’s Prof Yochai Benkler described the changing world of work as follows: “They are the people formerly known as employees. In a broad range of service industries, workers who once drew a steady salary are cutting out the employer and plying their services direct to people who used to pay companies, rather than people, to meet their needs.”

Or to use a well-cited example: a few years ago when Facebook (which did not exist a decade ago) bought photo-sharing site Instagram, it paid a whopping $1-billion for a company that employed only 13 people.

In the same year, Kodak, which at its height employed 145 000 people, went bankrupt. As The Economist notes, “the new economy is remarkably light on workers”.

That’s the scary world we live in and to which South Africa, a small economy, dependent on and buffeted by these forces, needs to accommodate itself, and not imagine Canute-like that it can reverse these tides.

But there was no following echo, or even recognition of this reality in the state of the nation speech. Indeed, the very script which Zuma and the South African delegation read with some apparent success to the World Economic Forum seems to have been discarded. In the Swiss Alps we proclaimed to investors that “South Africa was open for business”, and cited the investor-certainty in the National Development Plan.

Back home, in the Sona speech, we seem to have slammed the door shut and reheated yesterday’s announcement with the day-before-yesterday’s ideas.

At the Mining Indaba, leading foreign investors indicated that mining companies were “sitting on their wallets” when it came to investing in our bedrock industry. Mineral Resources Minister Ngoako Ramatlhodi confessed that he had been ambushed by ministerial colleagues into reneging on a closely fought agreement with the local Chamber of Mines on the vexed issue of “gate prices” for local strategic minerals.

Instead, we are to enter the brave and state-imposed world of “development pricing”. In effect it is an asset-grab, which even roused the normally shy Chamber of Mines to declare this will “break the back of the South African mining industry”.

Zuma said not a word on this controversy. He spoke of mining as the “backbone of the economy” but simply ignored the fire lit by his own government to immolate it.

But he did offer further legislation to “promote worker rights” and to “regulate” the practices of “private employment agencies”. All this is intended to “prevent the abuse of unsuspecting workseekers”.

It will simply further remove our country from the reality of the world we are in, rather than the socialist utopia the ANC dreams to inhabit.

The speech also gave a half-nod against the madness of the tourist visa regime which threatens to choke the one growth industry which could supplant ageing and uncompetitive mining as a job-creator and nation-saver. It will be recalled that the new visa regulations were announced last year without a single study or pilot project.

Now Zuma tells us “we will prioritise a review” of them. I suppose putting the cart after the horse is better than disposing of the animal completely.

But just before this announcement, he proclaimed — without any evidence to motivate — that the government would ban foreign land ownership entirely and limit farm owners to 12 000ha. Why not 5 000 or 50 000 is not explained; nor is the likely benefit even alluded to at all. I can think of multiple harm in terms of crushing foreign investment and promoting food insecurity; these too are left unaddressed.

Presidents today, no less than divine-right kings of old can, despite their pomp, powers and privileges, in truth not do much to change the economic forces of life. But, as every good doctor knows, they should be bound by the equivalent of the Hippocratic Oath: “Above all, do no harm.”

This article was first published by The Times

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