Category: Development

Old King Coal be damned

icebox.jpgWHEN the electric icebox was invented, thousands of ice haulers went out of business.  At the turn of the 20th century, nearly every family, grocer, and barkeeper in South Africa had an icebox. But ironically, South Africa’s dependence on ice created the very technology that would lead to the decline of the ice empire — electric freezers and refrigerators.

During the early 1900s, these appliances became more reliable, and by 1940, millions of units had been sold. With freezers allowing people to make ice at home, there was little need to haul massive quantities across the country.

We can’t stop progress and if we do, we risk losing far more than jobs, our Earth and our human habitat is at risk. Because of altered circumstances, Eskom has decided to shut down five coal power stations — Hendrina‚ Kriel‚ Komati‚ Grootvlei and Camden. The termination of coal truckers contracts has lead to a furore, with Cosatu labelling it a “hostile act”.

We can’t turn back the clock. This is not simply about Independent Power Producers (IPPs), as 250 medical professionals and medical organisations stated in the Durban Declaration, climate change is a medical emergency. According to the Lancet, climate change is the greatest global health threat of the 21stcentury.

Each year has seen an increase in global ambient temperatures caused by the release of Greenhouse Gases (GHG) associated with carbon and fossil fuel such as coal, with the resulting melting of permafrost and the polar icecaps, retreat of glaciers, thermal expansion of the ocean and most indicators are off the charts. Africa will suffer most from increasing temperatures. Workers will be most affected by associated loss in productivity.

We can’t afford to live under domes with an altered climate, neither can we afford to miss out on the renewables revolution. Far from being a scourge of privatisation, it is one of our country’s few success stories, continuing to attract investment, continuing to produce jobs and the roll-out of renewable energy is very impressive. It represents a paradigm shift, we dare not ignore.

A way must therefore be found to accommodate the major shift in energy priorities and the sudden dislocation of an entire industry. Truckers can truck goods in other markets, we must assist them, but we cannot step back from the icebox analogy and the melting point — we really no longer need a coal trucking route, nor a coal industry and its cost in terms of human life.

One can only suggest Eskom needs to be more strategic in its approach and truckers need to given the resources to regain control over their lives. Government must assist in skills retraining and investing in adult education that will help families deal with the crisis. It must not be mislead by the unscientific opinions and haranguing of union bosses.

SEE: Earthlife Africa wins court challenge

Extract Published in Cape Argus, Letters 9 March 2017

Proposed tax on fruit juice is pure evil

PRAVIN GORDHAN found a sneaky way to avoid raising VAT and it isn’t healthy. Promoted as a health tax, the sugar tax quickly snowballed into an all-out tax on anything sweet, including dividends.

The problem with the finance minister’s health claims, is that they don’t hold up to scientific scrutiny, for starters, South Africa is a major fruit producing nation, and in the battle between fast food, sugared drinks and cola’s, the beneficiaries have invariably been the export fruit market and consumers overseas.

Now with a whopping 11% tax on sugared drinks being extended to literally everything, including ‘intrinsic sugars’, read 100% fruit juice, the health alternative is going to be even more out of reach of the poor, as well as pensioners, who are expected to consume what?

Bottled water?

And to live off what, five and dime spaza stores?

There is a major and significant difference between the active ingredients in all these products, financial, health or otherwise.

Fructose found in fruit breaks down in your liver and doesn’t provoke an insulin response. Glucose found in cola drinks starts to break down in the stomach and requires the release of insulin into the bloodstream to be metabolized completely. Fruit juice contains plant phenols and antioxidants, while ordinary sugar drinks do not.

Conflating the two, like the conflation of dividends and the banks who dish them out, will prove to be a costly and unhealthy error by the treasury.

For years, the sin taxes authored by treasury have targeted alcohol and alcohol drinkers, driving the beer market at the expense of more refined and hardtack liquor. Now with sugar in its sights, treasury has found a convenient scapegoat. Taken to its logical conclusion, we are likely to see a hit on fresh fruit and the proverbial fruit tree itself, which may  feature alongside sweets and chocolates, and milk products, in future budgets.

Talk about taking popsicles out of the hands of children, but this is exactly what Mr Gordhan has achieved this year.

The reason why budget 2017 is hugely problematic, more so than any previous budgets, is because of two vectors:

The first, is the ANC and its ‘tax and spend‘ strategy which has resulted in a budget deficit and resulting need to service debt, the cost of which runs at an enormous R162.4 Bn. According to reports, this burden is not projected to come down any time soon, and can only get worse.

Far from austerity and prudence, the budget is rather shy when it comes to trimming spending. To give you an indication, this interest figure is almost the same amount of money the government spends on healthcare each year, projected to be R187.5 Bn.Then there is the enormous burden placed upon individual taxpayers, who must feel a bit like victims of a hit and run.

Personal income tax in South Africa is currently in an alarming disproportion to income tax generated from corporate taxation. Private taxpayers thus contribute almost 2.5 times as much as corporations, the figure grows to 3.6 times if one adds VAT and even more when one considers the fuel levy.

This trend is global, as more corporations hide behind tax havens, while ordinary citizens increasingly fork out more tax to cover the deficit.

The state will continue feeding SOEs such as ESKOM and SAA in the dirigiste economics that has become the hallmark of the ruling party. Tax on road transport has increased via the fuel levy. On a brighter note, the government intends to roll out new trains and public transport services. One can only remark on the contradiction between the national airline, and the rail agency.

NOTE: At writing this, there was no clarity from the media on whether there is a current exemption for fruit juice or not, and exactly how the new intrinsic sugar regime is being implemented. Health24 reports that fruit juice is included while The Herald reports that the deputy director-general Ismail Momoniat has told journalists that ‘Treasury proposed to introduce a threshold that would make the first 4g of sugar per 100ml beverage exempt from the sugar tax. He said 100% fruit juices and milk products would be exempt.’

Reforms for South Africa’s future

RECENTLY the Wall Street Journal ran a series of articles, celebrating the country’s 250th birthday and dedicated to shaping the future . What would the America of 2026 be and how would the nation arrive there? Suggestions ranged from infrastructure investment, gender equality, taking charge of climate change, respect for nature, the rise of the millennials, rekindling the revolutionary spirit of 1776, deregulating the Internet, breaking government gridlock, and more competition.

We think South Africa could do a lot better than simply following America’s example. As our country reaches the 20th anniversary of the signing into law of our Bill of Rights in December by founder, Nelson Mandela, we invite readers to submit their proposals for a better future to Medialternatives. What will the next 20 years be like, what will it take to get there?

Below are a few suggestions with regard to reform.

Justice Reform

Providing greater access to justice for ordinary citizens by capping legal expenses. Creating a more inclusive justice system by placing the Constitution as well as citizens interests as paramount — extending the role and practice of lay assessors –providing the option of a jury in capital crimes and defamation cases. Greater accommodation of the public interest through broader media access and reporting. Greater independence by ending the abuse by law firms of proxy judges i.e the acting judgeship system, and giving greater independence to civil institutions such as the public protector.

Economic Reform

Putting a stop once and for all to the legacy of apartheid economics, monopolies and spatial development. This would entail chopping SOE behemoths into smaller, manageable units able to compete with each other. Creating an energy commons that allows for independent energy producers as well as smart grids. Ending Telkom’s home cable monopoly –allowing landline operators to compete, especially in the broadband sector. Allowing innovative commuter services and competition in rail transport. Selling ailing SAA and ending the annual bail-outs of the apartheid era airline.

Political Reform

Correcting the mistakes introduced by our proportional representation system, by making MPS more accountable to their constituency. This may entail a combined ward and roll system whereby MPs without sufficient local ballots are prevented from succeeding purely by the roll system. Tightening the rules around campaign funding, making MPs more accountable when it comes to disclosure of assets and implementing rules on state capture. It should be impossible for large corporates to exercise undue influence over the nation’s political representatives.

Education Reform

A nation which focuses on improving itself through free education, lifelong learning, youth empowerment, access to learning materials, language labs, computers and other tools, correspondence courses, video materials and study aids — all  forming part of guaranteed access to education . Broadening education to include life skills, home economics and equivalent assistance for all households and citizens. Introducing civics classes to provide a sense of national belonging for all citizens, whilst promoting understanding, continuity and access to civil structures and institutions.

Social Reform

Placing distributionism at the centre of our social welfare system. The country should be run like a benevolent corporation responsible to its shareholders. The president is merely the chairman or cheerleader. Profits should be disbursed to all citizens on an annual or biannual basis. This could form part of an unconditional basic income (UBI) paid to each and every adult irrespective of race, class, colour or creed.  Supported by a market economy that coexists alongside social welfare.

Health Reform

Improving public health provision. Raising the number of doctors per person to first-world levels. Providing benefits or incentives for citizens to access private healthcare, in a duel system. Taking a preventative and complementary medicine approach to solving some of South Africa’s health problems. Promoting sports, nutrition and access to recreational  facilities. Providing open air gyms, holistic care that includes therapy such as yoga, martial arts and art.

Environmental Reform

Retrieving our earth rights, those groundbreaking environmental rights guaranteed in our constitution but diminished under successive ANC administrations. Returning the values of NEMA and other environmental legislation.Treating nature as infrastructure for future generations. Creating green urban zones, parks, nature facilities.  Placing ecology at the heart of ecological sustainable development. Lowering climate footprint. Reduce, reuse, repurpose, recycle, repair.  Providing bicycle share schemes, boosting EVs and lowering impact of industry on nature.

 

 

End of the road for Zuma’s ANC?

THE LOSS of the Johannesburg, Tshwane, Nelson Mandela Bay metros, means all major South African centres with the exception of Durban, Bloemfontein and Kimberley are now controlled by the opposition Democratic Alliance. It is a major upset for the ANC, a political movement which has ruled South Africa for the past two decades. Having once stood on the shoulders of giants such as Nelson Mandela, Oliver Tambo and Walter Sisulu, the party is squandering its struggle legacy under Jacob Zuma.

It is no secret that the country’s proportional political system has delivered a stinging defeat for Zuma. Metro government, alongside provincial government, compete with national government and thus allow a semblance of regional autonomy. The situation is akin to a trilateral democratic order —  or having a Republican Senate and a Democratic House of Representatives, and also a conflicted executive President —  except here we see the metro system paving the way for future DA control of the provinces, and an overdue national renewal, come the national elections.

South Africa’s National Assembly and National Council of Provinces, although both ANC strongholds, could very well succumb to the strange situation today, in which the blue machine of the DA, has an erstwhile voting partner in the red EFF at municipal level. The DA has entered a number of coalitions with smaller parties such as COPE, IFP and UDM.

Increasingly under siege, from the party’s own ranks, and traditional partners such as the SACP, the beleaguered Zuma administration has chosen to deflect criticism following the election, with another Nenegate, followed by more trade deals. Thus in the awkward Janus masked double-step of JZ, the administration is selling trade to appease the middle class, whilst paradoxically attacking the party’s own finance minister, apparently to show the masses that Number 1 has a grip over the democratic ‘revolution’.

One could not make up this kind of formulaic Marxist illogic, even if one were a beret wearing, champagne drinking activist in birkenstocks . The result is an ideological vacuum which is also reflected in the liberal opposition’s dependence on the far-left, and surely the demise of the very modus operandi which created the ANC?

That the latest moves against finance minister Pravin Gordhan emanate from within the ANC top brass is clear. Although Zuma has repeatedly stated that he is powerless in the face of the Hawks investigation, it is the ANC which needs to account for the manner in which the investigative entity, once known as the Directorate of Special Operations (DSO) or Scorpions, was turned from an independent investigative unit into a mere political lapdog.

The DSO  was once a unit of the National Prosecuting Authority of South Africa, a multidisciplinary agency that investigated and prosecuted organised crime and corruption. In order to protect Zuma from the Shaik investigation, and various related scandals, it was the ANC which decided to merge the Scorpions with the SA Police Service. The Khampepe Commission, thus drastically reduced its power, and effectively placed the unit under the national executive, Quo Vadis Zuma?

Although many ANC veterans are extremely vocal over the antics of the President, who is embroiled in a number of serious controversies, including allegations of graft and sexual impropriety which refuse to go away, none appear to see the irony.  Even with Sipho Pityana launching a stinging attack on the President, at the funeral of Eastern Cape ANC stalwart Makhenkesi Stofile, one can only wonder how it is possible that the president who is increasingly seen as a liability, is still in charge. This despite efforts at damage limitation, which have sent Zuma on a host of trade missions, the latest being his attendance at TICAD, followed by a trip to China.

Nepad in Nairobi 2016 gives hope for African Renaissance 2.0

NEPAD together with Tokyo International Conference on African Development (TICAD) are hosting a continental get-together. With the backing of Shinzo Abe, Prime Minister of Japan, and heads of the AU via the continents very own NEPAD agency, the African Union is finally  producing a “brilliant blue-print for African development in conjunction with Japan.

Since I am barely, what one could even consider a Japanophile, and thus only speak a smattering of Nihonji, and read absolutely no Kanji, lest I end up rewriting history, I  will instead post an official message below from Abe, addressing our “African Dream” ,  TICAD IV, (and thus NEPAD, and AU) to be held in Nairobi, later this month.


THE TICAD VI in Nairobi will have historical significance, as it will be the first-ever TICAD to be held on the African soil. TICAD, the most traditional forum with African countries, was launched after the end of the Cold War under the initiative of the government of Japan to promote development in Africa.

TICAD is a process in which Africa draws up a brilliant blueprint for its own development. The African Continent is the biggest frontier of the 21st Century. Having the highest economic growth rate among the major regions of the world, it needs the vitality of the private sector first and foremost to develop even further. Under the principle of “From Aid to Trade and from Debt to Investment,” the Japanese private and public sectors will support the development of Africa, led by Africans themselves.

Currently the “African Dream” is being crystallized in the form of Agenda 2063″. To realise this dream, Japan will contribute to two of the key pillars of the Agenda in particular, which will be addressed in depth at TICAD V1.

First, development of quality infrastructure is imperative. Infrastructure is essential for growth and therefore, it is necessary to have high quality and longevity of infrastructure. Japan will provide the African continent with quality infrastructure according to the needs of each country.

At the same time, Japan will work on establishing healthcare systems to protect people’s lives. Japan played a central role in incorporating the realisation of universal health coverage (UHC) into the SDGs, which was one of the main agenda items at the G7 Ise-Shima Summit in July this year. Japan will promote the realisation of UHC in Africa as well.

TICAD is an opportunity for Africa to present its own “African Dream” and work hand-in-hand with Japan to realise it. I sincerely look forward to meeting you in Nairobi on August 27 and 28 to discuss what Africa aims to become in 20 to 30 years from now.

Shinzo Abe, Prime Minister of Japan

Will Brexit give way to a Brixit?

THE EXIT of the United Kingdom from the European Community is not solely a result of economic forces (who would vote for market turmoil?), but is rather an abject political lesson in democratic power relations. Will Brexit give way to a Brixit, the dissolution of BRICS?

If it wasn’t the constant flow of immigrants from the continent that riled the British voter, then it was the growing centralisation of power in Brussels, the plethora of EU legislation, the imposition of European laws and legal precedents and the resulting erosion of the powerful common law in Britain, which appears to have put paid to the European union for the meantime.

As Larry Kudlow writing for CNBC online put it: “For a country which has routinely acted to limit the power of royalty, which holds stock in documents such as the Magna Carta … Britain will regain its political freedom, its autonomous self-government, and its independence from an European Union that is spinning out of control under the power of establishment elites, unelected and unaccountable socialist bureaucrats, and a court that is increasingly making legal decisions that replace Britain’s powerful common law.”

The same uneasy indictment could easily apply to other economic blocs such as SADC, the AU and its much vaunted rival and successor, BRICS. In the short space of two decades, South Africa’s political leaders have taken our nation into a number of regional and international, monetary and economic unions. The introduction of the Rand-based Southern African Development Community (SADC) on 17 August 1992 was quickly followed by the African Union (AU) 26 May 2001, and then BRICS on 16 May 2008.

By all accounts South Africa is thus a serial unionist. Having arisen like the United Kingdom as an aggregation of several states, including the Boer Republics, Cape Colony and Natal. The country’s first experience as an economic and political union was as a member of the British Empire, followed by the Commonwealth, a block of 52 nations. Then another bout of Republican nationalism followed, with successive periods of relative isolation resulting from apartheid.

Upon the emergence of the new era, a majority government,the Bill of Rights and an inclusive democracy, South Africa embarked on an outward path, which lead to a regional 15 member economic block in Southern Africa including Botswana, Namibia, Lesotho and Swaziland. This was quickly followed by the rise of the 54 member African Union under Mbeki. By all purposes, an attempt to emulate the emergence of the EU.

The result inside the country was a long boom, as South Africa became the gateway of choice to the rest of Africa. But then things began to unravel somewhat. Not content with being a regional superpower within the AU, South Africa, ever much the Casanova of politics, jumped into bed with Brazil, Russia, India and China to form BRICS. All of which, except for India, have atrocious levels of public debt and weak currencies. Brazil was recently given junk status.

It is this awkward attempt to create an alternative to the Post-WW2 Bretton Woods structures such as the IMF and World Bank, which has presented huge problems. The grouping is not simply a marriage of convenience, predicated on the numbers, like the G20, but has come to dominate foreign policy, to the detriment of both the SADC region and the increasingly insignificant AU. Under the Zuma administration, one could be forgiven for thinking that both SADC and the AU no longer exist. The result can be seen in the re-emergence of regional conflict, such as the political turmoil in Mocambique and continental instability.

Time to think the unthinkable. Time for a Brixit?