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South Africa
Friday, December 1, 2006
The State of play – all back to front

South Africa’s personality, as reflected in a potpourri of 2006 anecdotes, suggests that inflation targeting is missing the point……..

Border controls
Because of poor border controls stolen and hijacked vehicles leave, while illegal immigrants enter the country. Somali shopkeepers living here are being exterminated.
Capital formation
Listed companies on the JSE have fallen from about 657 to just 400, reflecting takeovers, mergers and disinvestment. It reduces participation in capital formation.
From Gautrain to 2010 World Cup, from Municipal tenders to dubious personal relationships with fraudsters and criminals corruption has become a way of life.
Criminals have declared war on society. Innocence is based on whether you can run fast enough. The government’s response is to provide security and bodyguards for its elite. Police stations resort to signing up to security armed response companies. On the other hand, security guards copy taxi drivers and go on the rampage because they are not happy. Murder rates, rape statistics, burglary, theft, bank heists, fraud are world beaters. To mention the figures is too shameful.
Schools are increasingly wracked by violence, intimidation by gangs and drug abuse. Numerous cases of stabbing, even murder at school. A grade 11 running a loan scheme is murdered. He was 19 years old – what is he still doing at school anyway? The government diverts funds from building new schools to paying for repairs of the many vandalised premises.
In South Africa 5.5 million people are infected with HIV/AIDS, up to 800 die each day; no progress the last 10 years in reducing the country’s horrendous infant mortality rate; huge increase in heroin and tik addiction; medicine pricing fiasco has lead to the closure of 100s of pharmacies around the country.
Instead of removing vagrants from the streets, providing accommodation for the homeless and imposing attendant laws the government complains that they should be allowed to urinate in the streets because they have no where else to go.
Virtually every sector of the economy is plagued by monopolies. Controls of suppliers and supplies, and barriers to entry are viciously applied.
Catch a politician or municipal head red-handed, and you’re in trouble for a ‘smeer campaign’. Send a fraudster or rapist to jail and it will be nothing compared to ‘what we faced in the struggle.’ Indeed, ‘struggle compatriots’ seem to think they have a ‘get out of gaol free’ card (true or not the message is nevertheless conveyed, which is wrong). A Correctional Services Commissioner is arrested for drunk driving. Instead of acknowledging a wrongful act she says she “survived bullets during the struggle; I am not going to be destroyed by the media”. Huh? Then there was the R83m spending spree by SA National Defence Force officials; while they lost 535 technicians and 70 pilots since 1994 to retrenchment.
Poverty and unemployment
More than a decade after the ‘end of the struggle’ there are greater numbers in poverty than ever before (18 million), highest unemployment rate ever (38%); and now in the last 18 months at least 600 cases of civil unrest. People are getting very angry. Informal settlements are mushrooming because the people cannot afford housing. Some areas can’t cope with the effluent. In any event at least 30% of existing sewage installations countrywide are in dire need of repairs.
Skills shortage
The government restricts immigration of skills (so no skills today); imposes heavy taxes on the importation of books and ignores problems in education (so no skills tomorrow). Since 1994 approximately 1 million people have emigrated, taking their skills, the education and skills of the future generation, their tax base and moral base with them. Affirmative action marginalises existing skills.
Harbours are clogged because of an inefficient rail system. Taxi drivers indulge in aggressive marches in protest against ‘unfair discrimination’ by traffic officers. Taxi drivers complain about being harassed, arrested, fined, or their vehicles impounded for breaking the law.
There are at least 210 000 unroadworthy vehicles on our roads, and over 24 000 fraudulent licences, despite the new credit card system introduced at huge expense in order to thwart fraud.

The solution
It’s as if government has got one of those confounded answering services: your call is important to us, please hold while we transfer you to the next available consultant. Unfortunately too many people are putting their phone down in frustration and leaving the country. But that should not be the solution.

This is a bit of a rambling list, by no means exhaustive; if anything, rather minimal. As for a solution, that’s easy: the government should take each point and do the opposite.
As Chairman of the Institute for Justice & Reconciliation Charles Villa-Vicencio was quoted as saying recently, “If we focussed on crime, corruption, public transport, education and health we’d be on the right track.”

Copyright © Insurance Times and Investments® Vol:19.6 1st December, 2006
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