The clock is ticking Cyril – time for action

It’s a cliché but this powerful analysis – cleverly based on the rhetoric of President Cyril Ramaphosa at the ANC’s 110-year anniversary – demonstrates that ‘the more things change, the more they stay the same’. What’s good for the NP goose seems to be good for the ANC gander as racial policies and exclusive legislation remain the norm, ostensibly to reverse the racial legacies, but perpetuating alienation and separation. Here’s one illustration; a quick calculation of the known number of BEE beneficiaries shows these policies benefit well under 0,1% of the population, giving rise to the rampant rent seeking and corruption the Ramaphosa faction so easily lays at the door of the Zuptoids. It’s a bit more endemic and dispersed than that. The thing about espousing silken platitudes and seemingly profound truths is that they’re universal – as this treatise so eloquently reveals – using international examples of real reform that have borne huge fruit. The clock is ticking… – Chris Bateman

Dear President Ramaphosa,

January 8 statement at the 110th anniversary of the ANC

Your declaration on non-racialism sounds the end to statutory discrimination and will consolidate our nation for an inclusive modern economy

Congratulations with this remarkable celebration.

Your declaration on non-racialism sounds the end to statutory discrimination. It will consolidate our nation for an inclusive modern economy. Urgent and fundamental reform in the 74 days left to the investment conference on 24 March 2022, will change the trajectory of our economy.

Your declaration on non-racialism is the clarion call for renewal, the catalyst for a MODERN INCLUSIVE ECONOMY, FOR A MODERN GENERATION:

“Non-racialism is a fundamental principle of the ANC and lies at the heart of our objective to build a SA nation with a common patriotism and loyalty in which the cultural, linguistic and religious diversity of the people are recognised. It is only the ANC (as organisation) that can ensure that this objective can be achieved, no other organisation can do so.”

We welcome your open invitation to engage in national action to embrace renewal, fully and urgently. We offer our participation also for a social compact, a capable, ethical, developmental state and a better Africa for a better world.

You referred to a ‘renewal commission’ but instead, for the urgent action you called for, we request an all-participating ‘War Room’ that will assist you to urgently achieve fundamental reforms, to co-ordinate national synergy to ‘groom’ and change the trajectory of our economy for the investment conference.

Therefore, sanitise our legislation of all vestiges of racism, specifically more than 30 employer-unfriendly laws (regulatory ‘cholesterol’ that clogs the system).  

Remember Chief Albert Luthuli’s words spoken in 1961, that racial politics cannot change economic fundamentals. This reality caused the downfall of apartheid and is now ruining our economy. We must sanitise our legislation (specifically labour laws) of all vestiges of racism, undue protectionism and preferential treatment, race quotas and similar growth restraining notions, not with words, but with quantum leaps in fundamental reforms. BEE beneficiaries, estimated at only about 50,000, amass fortunes while most of the population suffer.

Labour legislation- We must abolish draconian labour laws and excessive fines and penalties of up to R2 700 000 and imprisonment of up to 10 years imprisonment imposed by the BCEA, Employment Equity Act, UIF (Unemployment Insurance Fund), COIDA (Workmen’s Compensation Fund) and Skills Development Plans.

Bargaining councils are a relic of the colonial past. It was developed to protect artisans against untrained entrants to their trades. Today, unions demand national agreements on the improbable argument that conditions are identical across the country. They then request the Minister of Labour to extend their agreements to non-parties. Bargaining councils burden wage bills by between 18% and 33%. By stopping the extension of agreement to non-parties the economy will receive at least a 2% boost and help to restore our status as an international investment destination. A MEIBC survey found that 91% of the participants (in the metal industries) would like to withdraw and would not invest in the Metal Engineering Industry under the current MEIBC dispensation. Ninety-four per cent felt that there would be no future for manufacturing in South Africa with the next five years, should the current MEIBC dispensation continue; 89% would not employ more people with the next 12 months. Council agreements benefit an elitist only; 7% of our total population of 60 million who are employees and members of trade unions that are parties to bargaining councils.

In the 1980s, Ms Margaret Thatcher abolished bargaining councils and turned the British economy around. Unions had too much legal and political power vested in their leaders, too little in their members. The trade union leaders were barons, but Mrs Thatcher simply stepped past them to the men and women they claimed to represent and abolished a mass of restrictive practices that the bargaining councils have enforced.

In New Zealand, Mr Jim Bolger abolished the nationwide agreements by monolithic union power blocs with ‘compulsory union membership that bred wasteful strikes and scandalous abuse’. He said: “Only through a higher level of economic activity can we get the jobs we need in New Zealand.” In months Mr Bolger’s actions produced startling results, bringing down inflation from 15% to 1.3% and increasing the trade surplus by 500%. “The fall in average wages predicted by critics hasn’t materialised.” Mr Bolger said that appeasement of a minority came at huge cost for the economy and worsened poverty. SA must do the same. Mr Derek Hanekom is credited for today’s thriving global agriculture exports by disbanding the outdated agricultures control boards in 1994. The gross value of the sector has increased nine-fold since 1994, making transformation part of the legacy of the ANC.

BBEE, affirmative action, race quotas and similar growth restraining laws benefit an elitist group of a maximum of between 30,000, possibly only as few as 10,000 people to the detriment of millions of under- and unemployed people. It distorts the economy. Professor William Gumede of Wits University called for the abrogation of preferential procurement rules that helped pave the way for the Zupta-linked state capture, estimated to have cost between R500bn and R1.5trn.

The number of black dollar millionaires was overtaking white equivalents around 2015, according to New World Wealth. It is notable that before the imposition of affirmative action and black empowerment, Eskom was internationally recognised as one of the five most efficient power producers in the world. Now many large corporations have relocated to elsewhere in the world, leaving skeleton offices behind to avoid affirmative action, which made them uncompetitive internationally and to retain their highly skilled expertise. Research dispels the notion that racism is a major problem in South Africa. Data shows that only 3.3% of South Africans regard racism as one of the biggest problems facing the country and only 16% say they have experienced racism in the last five years. Head of Campaigns at the Institute of Race Relations (IRR), Gabriel Crouse, commented: “A majority of South Africans agree that racism allegations are an excuse used by politicians to cover up their failures. Everywhere, racism is pushed as a kind of opioid for the masses to dull people from confronting the real problems, but most people have already kicked the habit.”

Temporary employment services and independent contractors must be deregulated and promoted. Contractors are between 50% and 300% more productive than employees. Entry levels for employment must be opened up by ending minimum wages. It should not apply to the unemployed and trainees. Encourage individual employers and employees to enter into private voluntary contracts without the intervention of third parties.

Normally airlines (and businesses) employ independent contractors to bring costs down. In South Africa, section 200A of the LRA discourages entering into these contracts. A person is deemed to be an employee (with full benefits) until the contrary is proved. Taking into account an employee’s leave, sick leave, family responsibility leave, etc, he will work only 216 days or 60% of the year, while fully paid, with even fewer working days for women on maternity leave.

Modernise strike management (collective action) with ‘pendulum arbitration’ as an alternative practical way of resolving labour disputes, to ensure legal strikes are both peaceful and of shorter duration, without causing further damage to the economy.  

  • Deregulation will enable growth and millions of new jobs as the WORLD ECONOMIC FREEDOM INDEX proposed.

Low hanging fruit refers to the World Economic Freedom Index finding that by deregulating, the SA economy can excel.

Picking the low hanging fruit of deregulation for a modern inclusive economy for a modern generation will make SA a sought-after investor-friendly destination, following the example of India. India scrapped 1,536 acts that created 69,233 compliances and 6,618 filings every year, called ‘cholesterol’, leading to 200 million jobs being generated in the formal economy.

The Index shows that in a short time, we can create up to 22 million jobs in SA and 50 million in Africa.

“Poverty is man-made” (and can be defeated). Emeritus Archbishop Desmond Tutu

Mr Barack Obama said at Georgetown University in 2015: “The free market is the greatest producer of wealth in history; it has lifted billions of people out of poverty.”

Mr Trevor Manuel said our economy is held captive by forces for their own ‘elitist’ gain. This is confirmed by and empirical study of more than 60 economists, some Nobel Price laureates in their index of our economy.

The poor are now the largest interest group in SA. With an ‘Africa spring’, we can avoid a possible Africa winter and further damage to our economy.

After the KwaZulu-Natal/Gauteng uprising, experts warned that we have passed the dangerous 30% unemployment level set by the ‘Arab spring’ tipping point when unrest spontaneously erupts. Outbreaks have increased from 2.26 daily to 2.5 and even to eight per day, 35% to 50% of our people go to bed hungry. R416bn is being paid out in social benefits to 18.2m beneficiaries; 46% of the entire population of 60,041,994, burdening a working population of only 14,995,000. In 1994, only two million people were unemployed.

Not in KwaZulu-Natal or in Egypt, hungry and violent crowds listened to rhetoric.

For a successful investment conference, we must offer an inclusive modern economy for a modern generation – Nova Africa

‘Toyota-sized’ investors – We need a fresh investment narrative to attract risk-averse investors with high return expectations. We must attract at least 390 new ‘Toyota-sized’ investors to recoup losses caused during the July KZN-Gauteng looting, the most expensive unrest in the world that caused R500bn in damages. Toyota, our largest investor in KwaZulu-Natal has invested R1.3bn per year.

Financial dead-end – Vast swathes of the country’s infrastructure has already been destroyed including our rail network, which, in years gone by, was the best in Africa. Eskom’s debt is now more than R400bn while state-owned enterprises’ debt has ballooned to R692bn by December 2021.

SA’s national debt owed by government is R3.92trn as of today, almost R1trn more than just two years ago.

SA’s commercial and industrial property markets have now shown zero growth in 10 years, courtesy of collapsing municipal infrastructure and rapidly rising administered prices by municipalities across the country. The value of our beautiful (some of them) shopping centres scattered across the country’s major cities, have experienced declines in value ranging from between 30% and 80% in some instances. – Mr Magnus Heystek, Brenthurst, January 2022.

Unleash our dynamic economy, change the face of Africa and wipe out poverty – trade, not aid

Donor’s fatigue – International donors donate $100 in aid per person in Africa annually. They now realise aid has an unintended effect. Aid promotes dependency, distorts local economies and stimulates population growth. In 1970, 10% of the world’s poor lived in Africa. Today, more than 433 million, over 75% of the world’s poor live in Africa. Some forecasts suggest it could rise to 90% by 2030.

Every year, 20 million new job seekers enter the labour market in sub-Saharan Africa, one of the region’s greatest strengths over the long term. Within the next 10–15 years, nearly one in two new entrants into the global labour force will come from sub-Saharan Africa, and with an increasingly urbanised population, transformative reforms to strengthen social protection systems, promote digitalisation, improve transparency and governance, and mitigate climate change would help boost consumption in the region, which could also drive the global demand for goods and services.

Africa is the only continent in the world where official aid inflow outstrips private capital inflow by a large margin. This is problematic since no country in the world has achieved substantial development based on reliance on aid. Aid had not merely failed to work but compounded Africa’s problems. Instead, African countries should promote private sector development, entrepreneurship, and improve the tax culture.

To lead Africa, modernise our economy to alleviate poverty, hunger, the daily deaths of more than 14,000 children under five years old due to malnutrition, diarrhoea, malaria – 5,2 million per year – 400 mothers dying daily in childbirth (Unicef, WHO), and millions of refugees fleeing drought-stricken areas caused by climate change, deforestation and violence.

We must leverage a Marshall Plan effect. This innovative foreign aid model was introduced by the US to assist 16 European nations build their economies and strengthen democracy following the devastation of World War II in 1948. Mr Bruce Cameron of the JSE stated that the issuing of 800,000 to 2.08million outstanding title deeds will have a Marshall Plan upshot. “The benefits would be even greater than those seen in post-war Europe.” Ownership empowers and will unlock the intrinsic value of land and release enormous wealth and changes spending patterns. It will create millions of new jobs and businesses. New owners will access bank loans and bonds to upgrade, repair and enlarge their houses, buy white goods, cars, etc and thereby stimulate the economy. Cofesa sees potential in creating incubators for more than one million unemployed graduates to be nurtured to a new level of professional practitioners with new career paths to manage all aspects of town planning and the transfer of titles with a Fourth Industrial Revolution dashboards.

Deregulate to unleash the human capital of resilient South Africans

Our unlimited human capital potential is evident by the success of Mr Elon Musk who left Pretoria at the age of 17 and sought the greater economic opportunities available in the United States. He is worth around $100bn more than Amazon’s Jeff Bezos, and he is about 29 times better off than South Africa’s richest citizen, Johann Rupert. As of Tuesday, 26 October 2021, Elon Musk is worth $289bn or R14.6trn, to convert that into the currency of his country of birth.

Elon Musk is now so rich, he can fund SA for two years – and still be far richer than any local,

Elon Musk, at a 17 May 2021 visit to Brandenburg. (Photo by Christophe Gateau/picture alliance via Getty Images)

Elon Musks and Mark Shuttleworths are leaving the country in droves.

Mark Shuttleworth, born in Welkom on 18 September 1973, is the founder and CEO of Canonical. In 2002, Shuttleworth became the first South African to travel to space as a space tourist, and indeed the first African from an independent country to travel to space.

Brain drain  

Following Mssrs Musk and Shuttleworth, it is estimated that up to 1.8 million citizens have left the country since 1990 to live abroad, including 500,000 experienced, skilled and qualified citizens of all colours. More than 100,000 South Africans emigrated in 2020, including 90,000 whites, causing service delivery and infrastructure failure, disinvestment, unemployment and escalating unrest. At least 3,000 super-rich (those with wealth of $1m or R15m or more) “migrated” from South Africa over the past 10 years, as Andrew Amoils, head of research at New World Wealth, told Fin24 in April 2019. The monthly loss in tax is estimated to be between R10bn and R20bn.

7 Feb 2021: “Data from various sources suggests that around 23,000 South African tax residents emigrate each year in search of greener pastures,” says legal firm Webber Wen. Since 2015, the number of our dollar millionaires declined from 50,823 to 44,605 in 2020. Super-rich South Africans with assets exceeding $30m declined from 910 to 742.

With 4th IR digital migration, more people will work from their home offices from outside SA.

We need a quantum leap towards a modern inclusive economy for a modern generation – a Mustang, not a bloated Edsel. 

Our situation is a reminder of the financial dilemma the Ford Motor Company faced in the early 1960s. To regain market share, they designed the monstrous Ford Edsel and lost a further fortune. Then Mr Lee Iacoca rescued Ford with a perky, trim, exciting Ford Mustang. He saved time and costs by using parts of the Ford Falcon. He saved Ford.

Ford’s total assets were $267bn in 2020. SA has all the resources to go for a ‘Mustang economy’, a vibrant, energetic economy with millions of jobs.

Not junk status? Let’s unlock our unlimited potential and turn around the economy – Mr Brand Pretorius

Mr Brand Pretorius saved McCarthy Motor Holdings from bankruptcy after the group was declared technically insolvent in February 2001.Under Brand’s leadership, McCarthy was successfully recapitalised, restructured and restored to financial health, saving thousands of jobs. Today, the group employs 7,000 people, has an annual turnover more than R20bn and sells approximately 75,000 new and used cars annually.

Inspiration – the successful transformation of the SABC in the 1970s to SABC-TV, the most modern of its time; a platform for talents and creativity, inspiring MTN, KYKNET, SENTECH, TV production houses, etc.

South Korea had a lower per capita GDP than SA in 1960. Today. their per capita GDP is 32 times higher. Compared to the world average, South African’s GDP per capita plummeted in 2019 and 2020, and its citizens are now in the poorest 40% of the world with our GDP per capita ranking – 107th out of 191 countries – economist Mike Schussler said in August 2021.South Africa’s per capita GDP was a third larger than Singapore’s in 1960. Singapore’s is now seven times higher than that of South Africa.

Botswana’s growth has outstripped even that of the Asian ‘tigers’. Mr Tito Mboweni called on us “to attend to a number of mistakes”. We must deregulate to unleash prosperity. Mr Barack Obama said at Georgetown University in 2015: “The free market is the greatest producer of wealth in history – it has lifted billions of people out of poverty.”

Operation Vulindlela’s reform proposals must be activated; proposals that have been on the agenda for at least a decade, if not longer. It will be adrenaline for our economy and inspire hope for the destitute and forge an ‘Africa spring’.

We look forward to a deregulated inclusive economy in 2022. Let’s act together and groom the economy in the days ahead into a new economic brand, a modern inclusive economy for a modern generation to enable people to participate in the economy. Ms Jesse Duarte in ANC Today on 20 November 2014 wrote: “Complete political and economic freedom are not without paradox.”

“THE PEOPLE SHALL SHARE IN THE COUNTRY’S WEALTH! All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.” (Freedom Charter).  This resonates with Ms Joan Fubbs, BA Honours, MSc, emmber of the National Assembly’s vision to move from a ‘welfare’ to a ‘workforce’ perspective; jobs instead of grants.

A revolution is coming

It is time for fundamental deregulation to release unprecedented economic growth ‘to affect the character’ of the revolution as Robert F Kennedy prophesied: “A revolution is coming – a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough – but a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability.”

Robert F. Kennedy

[Report to the United States Senate on his trip to Latin America and the Alliance for Progress, 9–10 May 1966].

Mr Michael Gorbachev turned Russia’s economy away from failing socialism and communism with Glasnost (transparency) and Perestroika (restructuring).

Deng Xiaoping’s Chinese reformer – since the beginning of Deng Xiaoping’s reforms, China’s GDP has risen tenfold. 

Mr FW de Klerk changed the course of history.

Former President Nelson Mandela at a media conference with apartheid President FW de Klerk in Johannesburg in 1990. Photo: Gallo Images via Getty Images

On 2 February 1990, then President FW de Klerk addressed the opening of Parliament, changing the course of history. He unbanned exile political movements, the ANC, the Pan-Africanist Congress (PAC) and the South African Communist Party (SACP). FW de Klerk also announced that Nelson Mandela would be released after 27 years in jail. Mandela was released nine days later. FW de Klerk also announced a moratorium on the death penalty and the end of the state of emergency, which had been in place for five years. The speech would lay the ground for the country’s first democratic elections that took place four years later in April 1994.

74 days Our best wishes in support for urgent and fundamental reform and deregulation, turning policy into deeds in the run-up to the investment conference on 24th March 2022.

May God bless you and Africa in abundance as always.

  • Adv Hein van der Walt and Dr Lawrence McCrystal.

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