Category: Development

Socialist complexity at heart of Eskom’s problems.

WHEN Medupi and Kusile were announced by our government in 2004 and 2007 respectively, the two coal-fired mega-projects were both seen as emblematic of South Africa’s democratic progress —  key to the ruling alliance and its plans for the future.

The ruling labour-left coalition was at the height of its power. With its roots in the victorious anti-apartheid struggle, it had made no secret of its desire for a ‘mixed economic model’, in which a socialist command economy would prevail alongside the capitalist economy, and where the energy sector, would imitate policies from the days of the former Soviet Union. What could possibly go wrong?

According to Pretoria technocrats, a new era of cheap coal would herald in cheap and plentiful electricity with which to ‘build the nation’. Both consumers and workers would benefit. The latter from long-lived and extended public works programmes centred around coal, which in turn would drive salaries and feed households which had experienced some of the worst ravages of apartheid ‘separate development.”

Thus it was that these two projects ballooned into costly engineering exercises, as complexity driven by the technocrats, bureaucrats and party officials, armed with Marxist texts and presidential directives, ruled the day. That Marxists tend to overtheorise economic problems, relying upon ideas such as ‘dialectical materialism’ and the ‘labour theory of value’ to arrive at their conclusions, in effect the triumph of ‘ideology over pragmatism’, has already been remarked upon.

What has not been said in the mainstream media is the manner in which unions such as COSATU, emboldened by socialist think-tanks such as the AIDC whose research is anything but lopsided, and with a culture of intolerance for differences in opinion, quixotically feed unemployment, climate change and the national debt. While the rest of the world is moving away from coal, South Africa’s coal ambitions have instead risen and include plans for at least several new coal plants such as Thabametsi, each one able to take our country into poll position as one of the top GHG emitters in the world.

“The main cause of its troubles” say Adjunct Professor Rod Crompton, is Eskom’s decision “to build two of the biggest coal fired generating plants in the world, (Medupi and Kusile). These plants are running way behind schedule, they’re over budget and the bits that are complete don’t work properly. They are probably the single largest disaster in South Africa’s economic history.”

Medupi is literally drowning in ash. The result of socialist bureaucrats implementing design changes via committee without sufficient input from scientists and engineers, whom they invariably ignore. This lack of concern for evidence-based research and scientific methodology in favour of ‘political education’ is not a new one, witness the failed Afro 4000 train debacle .

An editorial published by Engineering Weekly for example, debunks concerns from COSATU and others, surrounding loss of jobs due to renewables, and yet the union continues to demand a state-owned power utility on steroids, with little concern for loss of jobs in the broader economy and the tragic impact upon the livelihoods of those affected by outages and inefficiency.

“There is considerable support in South Africa” says Tobias Bishof-Niemz  for the notion that a transition in the electricity system from coal to renewable energy will trigger a jobs bloodbath at both Eskom and the Mpumalanga coal mines. A detailed analysis of the job numbers, however, suggests quite the opposite. In fact, it points to there being at least 30% more jobs in a fleet comprising solar photovoltaic (PV) and wind farms when compared with an energy-equivalent coal fleet”

Meanwhile the brazen union federation staged a protest march this week, in response to the President’s plan to unbundle Eskom, in effect calling for Eskom and its mounting debt, to be supersized. Unbundling alone may not be enough to offset the crisis. Creating completely separate, independent and regional power utilities able to compete with each other would have a better chance of survival.

Medupi alone is a R145bn disaster

Liberalism’s ideologues and their coalfaced discontents 

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Socialism under the ANC begat state capture, graft, corruption …

THAT IT would all go so horribly wrong for the African National Congress is best demonstrated by comments made by Moletsi Mbeki on national television. The ANC he says is really a conglomeration of competing, ‘factions acting in their own self-interest’.

What unites the party, aside from its competing sectarian and nationalist aims, is its avowedly ‘socialist character’. Problem is, wherever socialism has been tried in Africa, it has failed. Whether Tanzania under Nyerere, or Ghana under Kwame Nkrumah, South Africa’s experiment with socialism and the so-called ‘mixed economy’ under the ANC has fared no better.

While a successful roll-out of a social wage, has arguably made the ruling party, the envy of the rest of Africa, the word socialism itself, does not appear in the party’s constitution as such.

Socialism so far as the ANC is concerned, and as its policies demonstrate, has more in common with the socialism (or volkskapitalisme) under the former white Nationalist regime, than multifarious examples across the continent. In both instances, economic policies aimed at reducing inequality (in the latter example, the inequality experienced by poor white Afrikaners) ended up unfairly benefiting the party faithful — well-positioned insiders who sought to ‘take control of the commanding heights of the economy’, and who in turn created opportunities for graft, self-enrichment, maladministration, corruption and ‘state capture’.

of the Free Market Foundation argues “corruption is a feature and not a bug of socialism. Every socialist system is guaranteed to have a high level of corruption.

“The reason why a socialist system can never work” says i  “is the trade-off that has to happen at the heart of it – individual liberty in exchange for more power given to the state.” The fatal flaw inherent to party centrism and a dominant government promoting statism, (read ‘economic intervention’ via ‘state-owned-enterprises’) — has been endless bureaucracy, fruitless and wasteful expenditure and a never-ending litany of corrupt officialdom.

The latest revelations from the Zondo commission paint an appalling picture of a socialist-leaning administration in which political bribes of well-known politicians, cabinet members and officials have become the order of the day, and not merely during the tenure of Jacob Zuma but also under current and prior administrations and thus grand larceny by, and on behalf of, socialists — ideologically-driven corruption which continues to manifest under the Ramaphosa government.

The Bosassa debacle comes after the revelations of the VBS bank saga, and the 2018 indictment of former president Zuma on corruption charges. For analysis of the impact on the economy, one need look no further than the corruption scandals plaguing South Africa’s SOEs in effect all ‘State-owned bureaucracies’.

Eskom on its own has created a massive and embarrassing debt bubble, which risks upsetting the entire economy, and whose economic fallout is still being bankrolled by consumers locked into demands for annual 15% pa rates increases. Latest figures, show a massive impending R100bn bailout by treasury.

The central party, unable to deliver coherent economic policy, hamstrung by unions hooked on fossil fuels, oil and gas cartels, and equally inept socialist partners, and compounded by the perceived need to reign in a boisterous far-left opposition grouping, has resorted to ‘lekgotla‘ after lekgotla‘, each one promising action.

A party plenary held over the weekend, promised to finally to breakup the state power supply entity into competing parts, all begging the question as to why a lot more was not accomplished in the past 25 year of ANC rule to boost efficiency, and at very least avoid the current dire situation?

SEE: Defend South Africa’s Social Wage

Trump’s narrative on South Africa

IT is easy to dismiss Donald Trump’s tweeting on ‘white genocide’ and ‘land expropriation’ as simply the result of alt-right post-truth exaggeration. A deflection of the global attention from more pressing US domestic issues. Less apparent is the impact the twitter-lead spat will have on cooling relations between the two countries, and amidst rising tensions between the BRICS bloc, and the USA over China, and also relations with EU and Turkey.

Trump has for some months now, threatened to pull out of AGOA, a trade pact formulated under Mandela involving South Africa, the AU and the US.

State Department spokesperson has reiterated risks and consequences if South Africa embarks upon wholesale land expropriation without compensation, but the country is “not Zimbabwe”.

In a statement President Ramaphosa responded: “This is no land grab; nor is it an assault on the private ownership of property. The ANC has been clear that its land reform programme should not undermine future investment in the economy or damage agricultural production and food security. The proposals will not erode property rights, but will instead ensure that the rights of all South Africans, and not just those who currently own land, are strengthened. SA has learnt from the experiences of other countries, both from what has worked and what has not, and will not make the same mistakes that others have made.”

Both Congress and the Senate have recently shown cause to question what the US is getting in return for Africa’s unfettered access to US markets. The last round of trade wars, however saw cheap poultry being dumped on local markets to the detriment of the South African industry, with the country coming off second best.

It is therefore important to remember( in the same week that saw the demise of UN secretary-general Kofi Anan), that South African politics, often loud and boisterous, has tendered towards moderation and pragmatism at the end of the day, and that the ANC has a legacy of support for multilateral international organizations. South Africa a former British colony, still has strong ties to the Commonwealth.

In this respect, the country, one of the G20,  has one foot in the first-world and another foot in the developing world, an unenviable consequence of defeating apartheid and not simply the result of a troubled colonial past.  Pragmatic consensus-building and alliance-making based upon political realties may be the only path forward.

It would be a shame if the democratic order were to be upset by ideologues on either side of the Atlantic.

Liberalism’s ideologues & their coalfaced discontents

IT WAS the writer F. Scott Fitzgerald who said: “No grand idea was ever born in a conference, but a lot of foolish ideas have died there.” While the German philosopher Friedrich Nietzsche remarked: “We often refuse to accept an idea merely because the tone of voice in which it has been expressed is unsympathetic to us” and still Thomas Mann opined: “If you are possessed by an idea, you find it expressed everywhere, you even smell it.”

The reason I take the opportunity to provide readers with some philosophizing on the ‘history of ideas’, rather than the ‘idea of history’, is that there has been a lot of solipsising lately on the issue of liberalism and its purported antithesis, socialism, in the runup to and aftermath of the DA federal conference, billed as the ‘greatest opposition event ever’.

For those who might not already know, a solipsism (or circular logic) according to the urban dictionary is also “the belief that the person holding the belief is the only real thing in the universe. All other persons and things are merely ornaments or impediments to his or her happiness.”

Just how this applies to South African politics will become clearer. To begin, there has thus been a plethora of verbiage surrounding a relatively new idea in popular discourse, that of ‘black liberalism” with equal bouts of critique from humdingers, curmudgeons and opinion-makers on the left, schooled in dialectical materialism and political economy.

Thus Eusebius McKaiser’s A black liberal is not an oxymoron was followed by Mazibuko K Jara Black liberalism is an apology for capitalism  and Richard Pithouse The liberal licence to kill and more recently, Mmusi Maimane’s Building an African liberal agenda.

Jara opines that McKaiser’s “reclaiming of liberalism is ultimately flawed because it does not question capitalism’s core logic — the rights, freedoms and power of capitalists to maximise profits on the basis of appropriating the commons through the private ownership of the means of production, distribution and exchange, and the exploitation of labour and natural resources.”

Pithouse on the other hand raised an awkward caveat whilst attacking liberalism at its historical core, by listing its alleged policy sins. Despite its many problems, and yes, there are some positives, there is at the face of it, a common dilemma of seeing everything one disagrees with as mere “ornaments or impediments to happiness.” In South Africa,” writes Pithouse ” a high price has been paid for the ease and frequency with which attempts to assert principle in struggle — including commitments to feminism, democracy and, on occasion, even basic honesty — have been denigrated and dismissed as “liberal”.”

All this was water off a duck’s back so far as Maimane was concerned. A rallying speech by the leader of the old “Liberal Party” was big on building liberal sound-bites but short on substance: “As African liberals, ” he said “we have chosen a hard road. We have chosen to stand up to dictators and bullies of all stripes, even when it is politically incorrect to do so. We have chosen to defend the free expression of ideas, even for people with whom we disagree and whose views make us angry.”

One invariably gets the same point though.

Hence one of the reasons for writing this piece, partly out of respect for Pithouse, who defends civil liberties in the same way that Maimane does, but does so without suggesting any alternatives to the two dominant poles in South African politics, nor bothering himself with a critique of the abysmal track-record of the dominant political movement, is to provide readers with some all important context. That’s the ruling party whose ideological framework is abundantly socialist versus the avowed liberalism of the major opposition,

Please feel free to arrive at your own conclusions.

As “bookish revolutionaries” to use Julius Malema’s phrase were debating the pros and cons of liberalism viz. vi. historical materialism and its view of all history being the result of ‘a dialectical clash, of opposing forces’, South Africans were being entertained by the spectacle of the National Mineworkers Union (NUM) threatening to end its support for the African National Congress (ANC): “if government continues with its renewable energy programme,” said NUM, “clean power would “destroy jobs and create ghost towns in coal mining areas.” Please bear with me.

Earlier last month the National Union of Metalworkers of South Africa (NUMSA) along with Transform RSA, and the coal-truckers industry, had attempted to interdict the Dept of Energy from signing a raft of IPP renewable contracts to no avail. That ripe Marxist language and dialectical critique emanating from our unions, was geared towards a previous era of the steam engine, coal factories, fossil fuel barons, and coal-faced workers suffering under the whip of capital, and not the emerging 4th industrial revolution predicated as it is on digital innovation, open source electronics, and abundant energy distributed amongst the commons, in a dematerialised world in which the unions too, own shares, was becoming clear.

The trouble with soviet-style super-socialism and its advocates in the unions, many of whose members appeared outfitted in fatigues and whose leaders, some of whom bore a close resemblance to Fidel Castro, began with the protagonists wanting to ‘monkey-wrench the entire system’, the self-same mixed ‘market socialist’ economy which taxes and hands out benefits, and whose state owned utility Eskom and its mega-coal projects, meant that these very same unions derived further benefits from any extension of coal-contracts that were also part and parcel of the Gupta corruption schemes. It is important to note as Min Radebe did, there was no direct connection between the threatened closure of some coal powered utilities ending their life-cycle and the IPP programme.

One can see an emerging pattern here, a similar problem experienced during the Cold War 1950s, the problematic Marxist vision of ‘willing workers of the world’ uniting under a shared common cause to fight off the bosses and shareholders in any country, in order to become, what exactly?

The Soviet Union?

Here in the South Africa of 2018, a period no longer marked by communism and the Cold War, the unions were essentially complaining about the potential loss of a paltry 30 000 jobs, whilst jeopardising the creation of 60 000 new jobs in the economy, and more to boot. The unions was prepared to compromise air quality, emissions, the health and safety of millions, while ransoming the entire country with regard to climate change. One could not get more solipsistic and obstinate if one tried. In the eyes of union bosses, what mattered most in this struggle, was happy workers. The poor seeking jobs and thus a growing and sustainable economy, in which economic models were not based upon annual bailouts, but upon reality, the facts behind an economic model which worked, for these persons, the poor for all intents and purposes, did not exist.

So let’s give a bash at answering the moot question left unanswered by our nation’s critics. What are the alternatives to the liberal market economy, if any? And since I am not a liberal as such, let me explain briefly, as economic scholer Zhang Weiwei does, one such model, the China Model, significant in that it has pulled millions out of poverty and unlike the West, has not experienced successive periods of boom and bust. And before I do, let me place my civil rights cards on the table, since I don’t support many of the authoritarian elements still at play within the China of today.

The guiding philosophy behind the ‘China Model’, according to Weiwei can be summarised as  “Seeking Truth from Facts not from Dogmas, whether East or West.”

Weiwei goes on to say: “From examining the facts, leader Deng Xiaoping found that neither the Soviet Model nor the Western Model really worked, hence Beijing decided to explore its own way of development appropriate to China’s own national conditions.”

The system he says is oriented towards people’s livelihood. “Whether economic, social or political reforms, they must all be down-to-earth and produce tangible benefits … in material, cultural and other terms. This is why China has succeeded in lifting over 700 million people out of poverty, accounting for nearly 80 percent poverty eradication in the world.”

Special economic zones in which economic experiments are allowed to prove themselves first before being adopted by the broader system, are another factor attributed to China’s success.

Food for thought in a country which, despite its ideological stance, is still top of the list of the Gini coefficient marking ours the most unequal society in the world.

Decoding South Africa’s original sin

THERE is a narrative that goes something like this, “in the beginning the whites stole the land.” Since all land acquired during periods of colonial conquest must be the result of criminality, it follows those possessing land today, are criminals. The accusations of theft by leftists against farmers are biblical in nature. An original sin, that has turned into a commonly used slur and epithet against all persons deemed in South Africa to be white.

Thus whether or not you happen to be one of some 400 000 white persons living in poverty, often in squatter camps, the same logic applies. The same goes for working class Afrikaners and English-speakers renting homes, also excluded in one sense, from a non-stop discourse streaming over television screens and talk-shows, which literally views the dominant ethnic groups in the country as the rightful heirs to all land in the sub-continent, and anyone not part of this majority group, as a less-deserving, other tribe.

In this fashion, first nations such as the Khoisan (a collective term for sub-groups such as the Griqua) are excluded from an intellectual debate cast over the new media, often flying on twitter, whose goal is the overthrow of the constitutional dispensation and its replacement by a custodianship system similar to the apartheid-era Bantustans in which petty chiefs ruled over a tenant population. The confluence of leftist ideology within racial rhetoric and ethnic overtones is almost never remarked upon by non-racialists in the ruling party.

Africans, meaning those with a preponderance of African ancestry, whose origin is central Africa and not the sub-continent, nor Europe for that matter, are excused by such news pundits, from the same moral and ethical framework used to criticize former advocates of white supremacy. In this way, a black person is never a racist as such and may be excused from deploying racism — sometimes awkwardly referred to at best, as ‘anti-racist racism’.

If whites stole the land, then they should all be grateful at being willing parties to future land confiscation policies, the details of which are currently being articulated by the ruling party and other allied groups. In such a way of thinking, not only is “land expropriation without compensation” a done deal, but righting an historical wrong, a tragic injustice, is more important than food security, financial stability and a reliable system of land tenure based upon the preservation of ownership and title-deeds.

How does one ‘unscramble the omelette’ of decades in which a property market based upon private ownership, and the buying and selling of land has existed, and has been the status quo endorsed by national government? How do we correct for almost three decades of democratic rule and also three centuries of colonialism, the tragic 1913 Land Act, while re-engaging stalled land reform projects from the previous administration?

The  controversial parliamentary resolution on land reform has been referred by President Ramaphosa to a special committee for consideration and the government is planning a land reform roadshow which intends to canvass public opinion in all the nation’s provinces. A similar international roadshow already underway, is having a tough time winning over investors. A 75% parliamentary majority is required to amend the property clause in the Constitution.

 

 

Rainbow nation, time to call it quits?

THE New South Africa was founded as the culmination of a decades-long civil rights struggle. Dubbed the “Rainbow Nation” the country’s emergence from apartheid, was manifest evidence of the ability of both black and white to solve collective problems, to put aside history and to move forward into constitutional democracy. In recent years, the country has increasingly begun to look more like an apartheid bantustan, than the great society envisaged by founder Nelson Mandela.

After a boom period during the Mbeki era, remarkable for its reconciliation and promotion of black economic empowerment, the Polokwane-elected Jacob Zuma oversaw massive erosion of the economic base. For a decade Zuma effectively took the country down the road of kleptocracy, ethnicity and junk status.

One month after Cyril Ramaphosa became president, the former President and founder of Nkandla, was dethroned and charged last week, for a plethora of corruption violations, including fraud, money laundering and racketeering, moving commentators, to remark about a “Brazil Moment”

In 2017 Brazil’s President Michel Temer was similarly indicted on corruption-related charges for the second time, with prosecutors alleging he led a political corruption racket that generated R$587m in illicit funds over the past 11 years. Both South Africa and Brazil form part of the BRICS nations, three of which have received junk status in recent years.

While the formation of the African Union and its peer review mechanism was one of the hallmarks of the Mbeki Presidency, Ramaphosa has yet to chart a course in terms of the economy and to articulate a coherent foreign policy. The recent State of the Nation address merely hinted that corruption would be dealt with and that checks and balances would be reintroduced at the treasury, notwithstanding SOEs.

It will be difficult to undo the damage. Without so much as a mandate, Zuma catapulted South Africa,  into a geographical alliance that has more to do with Oligarchs and Russian and Chinese money than historical ties. The BRICs and its many associated intrigues such as the Gupta scandal, dominated political discourse in recent years.  While Ramaphosa is seen as more Pro-West and market-friendly, his ascendancy is not without its own scandals.

As non-executive director of Lonmin, a company implicated in the Marikana Massacre, Ramaphosa was forced to apologise to the victims for demanding that “concomitant action” be taken against the miners involved in wildcat strikes. It is within the context of a leftist break-away from the ruling ANC party that neo-fascist organisations and avowedly racist parties such as Black Land First and the Economic Freedom Fighters (EFF) have arisen.

It was thus the EFF, a quasi-Marxist party committed to “cutting the throat of whiteness” which tabled a motion in Parliament on the land question, in particular the adoption of “expropriation without compensation”, which would require an amendment to the property clauses in the Constitution.

The centre-right Democratic Alliance under Mmusi Maimane has also found itself campaigning on the issue of land reform, but significantly, in support of title-deeds and equal opportunity for all South Africans regardless of race. The former liberal party, eschews the notion of the abolition of private property and thus the policies punted by the ANC and EFF involving state custodianship of the land. Australia, a member of the Commonwealth, has offered to fast-track visas for white farmers in danger of losing their land to confiscation.

According to one report,”The rate of land reform in South Africa peaked in 2007, but has since come to a grinding halt. It has resulted in a change of ownership of only 5.46% of South Africa’s commercial agricultural land. Much of this land was transferred to the state, or to communal ownership groups.”

The figure is nothing to be sneezed at, the state has already given over an area twice the size of Swaziland to black tenant farmers. Instead of calling for a continuation of this process, the neo-fascist far-left has set its sights on state-ownership of the entire land mass of the Southern African continent, effectively calling for an exclusive Bantustan, where race not equal opportunity, is the determining factor, and where the state, not private citizens, are the drivers of production.

The plan is doomed to failure from the outset. Wholesale land confiscation would invariably result in a collapse of the credit and banking system. Not only would the confiscated land result in adverse ownership, but the many disputes which would arise, would invariably result in asset depreciation with the risk of major loan defaults, that central bankers are unlikely to underwrite.

Time can only tell whether or not the negotiated compromises of the Mandela era, which included property rights for all, and land reform within this context, will continue to define the country and its future trajectory, or whether it is really time to call it quits on the Rainbow Nation? A continuation of land reform within the constitutional framework is the only chance of success.

SEE: No, the Rainbow isn’t Dead

 

 

National treasury adopts DA position on titledeeds

National Treasury has adopted the DA position on private property in effort to stem the massive shift in allegiances over the land question. “From April, the Treasury and the department of human settlements, will spend an estimated 1.6 billion rand over three years to reduce the backlog of residents without formal ownership of their homes by among other things, paying the legal conveyancing required to get the deeds registered to the proper owners.”

https://www.iol.co.za/business-report/economy/south-africa-hastens-title-deed-handover-to-poor-homes-13762332

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