David Bullard says South Africans need to catch a wake-up,
before we go over the cliff
Last week the rand dropped to a twelve month low against
both the dollar and sterling. This is not a train smash
compared to where it has traded against both those
currencies over the past turbulent decade but it is
significant because the decline in value of the rand over the
past few weeks is almost certainly politically driven.
I wrote a column for the Sunday Times not long after the
ANC came to power expressing the view that the strength
(or otherwise) of a country’s currency is, in effect, the share
price of that country. These days that argument could easily
be knocked down simply by pointing out that the US, with its
sixteen trillion dollar debt , should have the weakest
currency in the world.
But back in the pre- quantitative easing days of the 1990’s it
was a fair comment and it remains a fair comment today
for those economies that haven’t resorted to smoke and
mirrors economics to survive.
The only reason the dollar is still mighty is that the US keep
up the pretence and the Chinese keep buying US bonds. It’s
all a huge confidence trick but it’s bound to end in tears.
Wouldn’t Greece have loved to have been able to print
money and get itself out of the dwang it finds itself in?
So, ignoring countries like the UK and the US and those
European countries tied to the near farcical Euro, it’s still
true to say that a country’s exchange rate is a pretty good
indication of what the rest of the world thinks of
it…..particularly when the movements are volatile. That
would be particularly true of South Africa.
Over the past few weeks we have demonstrated to the rest
of the world that we’re not very good at labour relations in
this country. We either give in to violent strikers and award
them a whopping 22% pay increase or we sack 12 000
workers as Amplats did last week. That is apparently 20%
of their total workforce.
It’s not impossible that all 12 000 will be re-employed y the
time you read this and that the mass sacking was a
strategic move in an ever complex game of Machiavellian
labour relations. But the message it sends out is not good,
particularly after the disastrous and globally televised
Not surprisingly labour now has the impression that
anything is possible providing the level of accompanying
violence is ratcheted up to appropriate levels. For example,
the current truckers strike stands far more chance of
achieving its aim if a few scab drivers are dragged from their
cabs and immolated or chased through the streets and
hacked to death with pangas. If a Sky, eTV or BBC film crew
can be present then so much the better.
Ludicrous demands for pay hikes way in excess of inflation
have become the norm and nobody seems to be getting the
message that these are either impossible to meet or, if they
are met, will inevitably lead to massive inflation. At this
point I expect some bleeding heart lib to tell me to try and
live on a trucker’s or rock driller’s wage.
The reason I chose not to become a rock driller was that I
didn’t like the pay and I get claustrophobia. I might still
consider a trucking job though because I rather like the idea
of driving the length and breadth of South Africa in
something large enough to flatten a taxi without me even
knowing it. You see dear lefties, it isn’t always about money.
It’s not only the antics of what we, without a trace of irony,
refer to as "organised labour" though. The other big bear
factor for the Rand is the impression the rest of the world
is getting that we don’t have a government in South Africa.
We have a chap called Julius Malema who gets more column
inches than the rest of the cabinet put together despite
being sacked from the ruling party. We have a group of
incompetent squabbling adults with commie pretensions
who are busy jockeying for position at Mangaung to make
sure that their snouts will still be near the swill trough next
We have daily reports of corruption on an epic scale by
publicly elected officials and we now have the news that the
Pres’s house building in Nkandla may end up costing
taxpayers more than a QUARTER OF A BILLION Rand.
Add to that the expensive cock ups of e-tolling and SAA and
even the most benign supporter of the struggle would have
to admit that all is not well in the rainbow nation. We are
hurtling towards failed nation status and nobody seems to
give a damn. In fact to mention such things is likely to result
in accusations that one hasn’t embraced transformation or,
worse still, that one is suggesting that those in power aren’t
up to the job; and that would be racist.
Talk Radio 702 suggest that all will be well if only we drive
with our headlights on but even their Polyanna propaganda
falls flat with anyone capable of rational thought.
We are, to put it starkly, knee deep in the hot and smelly
and sinking fast. Our traditional trading partners are all
practicing austerity so don’t look to them to fill the begging
bowl. Asian countries with far cheaper and less militant
work forces make stuff far cheaper than we can ever hope
Our labour laws are a massive disincentive to setting up a
business and our tax regime means that roughly 3.7 million
taxpayers will be expected to foot the bill for everything for
the next decade. When they have been bled dry then the
ruling party will have to resort to plundering pension funds
and private bank accounts.
So, if I hate it so much why don’t I leave the country?
(someone’s bound to ask). Firstly, I’m sixty and so I have a
far shorter timeframe to worry about than someone of 40
with kids. As I mentioned to a fellow sexagenarian the other
day, it’s quite comforting to be getting closer to the off
Second and more important…..if I really want to go I have a
very handsomely embossed document called a European
passport. Which is more than most of my fellow citizens
can claim so for heaven sakes wake up and get it right.