Category: Central planning

Anti-business, Black economic empowerment (BEE), Black-owned businesses, Central planning, Corruption, Crime against business, Developmental state, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Inequality, Job creation and unemployment, Lockdown, Market economy, Preferential procurement, Small and medium enterprises (SMEs), Small, medium and micro-sized enterprises (SMMEs), State Owned Enterprises (SOEs)

CR’s mask fell off: lives are less important than empowerment

Johannes Wessels
@johannesEOSA1

There is an increasingly high risk that South Africa will not by 2025 have recovered to its pre-lockdown levels of GDP. In a research report – Vaccines and re-opening: Covid-19 risks to the 2021 recovery – HSBC, one of the largest banks in the world, indicates that South Africa will not recover as quickly as most of the emerging markets.

HSBC places South Africa in a cluster of countries that will not by end 2022 regain their pre-Covid GDP levels. This list also includes France, Italy, Spain, the UK, Mexico and Argentina. According to HSBC’s estimates the rest of the Eurozone will have recovered by end 2022, with Germany reaching that target by the first quarter of 2022.

SA on the bus to Argentina

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Anti-business, Central planning, Competitiveness, Corruption, Credit risk ratings, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Economic Reconstruction and Recovery Plan, Expropriation without compensation, Job creation and unemployment, Land ownership, Lockdown, Municipal efficiency, Public service delivery

Neither Red Riding Hood, nor Tito Mboweni believes CR’s statements

Johannes Wessels
@johannesEOSA1

The statements of the government and the ANC are as unrealistic as the famous stories of Baron von Münchausen: both are so far from reality that they belong to the genre of heroic fantasy. However, the differences are also glaring. Von Münchausen’s tales are creative untruths, entertaining its hearers because of the skilful transition from reality to absurdity. The ANC’s untruths are serious policy statements, parading absurdity as real truth.

Whereas Von Münchausen’s tales emanate from a witty brain, the ANC’s tales emerge from an institutionally entrenched delusional disorder.

Baron Cyril von Ramaphosa

The very first paragraphs of the January 8 declaration suggested the following reality:

“The January 8th Statement… gives inspiration and encouragement…

“The people of this country have entrusted the ANC with the responsibility to… building a better life for all. Over the course of its history, the ANC has lived up to this responsibility.

“In government, the ANC led the reconstruction of our society from the ashes of apartheid misrule. 

“Prior to the onset of the global financial crisis, our policies contributed to the revival of our economy, the creation of millions of new jobs, the stabilisation of our public finances and the reduction of poverty.

“(T)hese achievements earned the ANC the confidence and trust of the South African people.”

Really? 

JSE’s head of equities voices his despair

  • The ANC has lived up to the responsibility of a better life for all: not even Red Riding Hood will believe that.
  • The government has stabilised public finances! Not even Tito Mboweni believes that (and if he does, Fitch, S&P and Moodeys don’t).
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Black economic empowerment (BEE), Black-owned businesses, Business incubation, Buying local, Central planning, Company tax, Cooperatives, Developmental state, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Enterprise regularities, Enterprise research, data and statistics, Entrepreneurial space, Export-led growth, Job creation and unemployment, Lockdown, National Gazelles Programme, Predictive capabilities, Preferential procurement, Small and medium enterprises (SMEs), Small, medium and micro-sized enterprises (SMMEs), Spontaneous order, State Owned Enterprises (SOEs)

Elastoplast for the knocked-out economy

Johannes Wessels
@johannesEOSA1

Just as a heavy punch on the side of a boxer’s head can disrupt his brain’s neurovascular coupling processes causing him to fall like a log, the lockdown blow had disrupted the intricate flow of funds in the economy. BankServAfrica’s figures for Black Friday confirmed consumers are still on the canvas: turnover declined by a whopping 52% and there was a 30% decline in the number of in-store card transactions.

The pockets of the majority of individuals and a substantial share of businesses now resemble those of the state-owned enterprises.

People are hesitant to spend with unemployment dramatically higher than before lockdown, due to the government turning off the income tap for most enterprises for at least 3 months, declaring them non-essential (in the case of the hospitality sector almost 8 months). The government has thus achieved not only the lengthening of the jobless queues but also driving the rest of the population closer to poverty.

It was a cruel knock-out blow by the government

The religion of the developmental saviour

The subconscious neurovascular coupling process ensures oxygen supply in nano-seconds through blood flow to the brain segments most active at that split second. A boxer can recover from a knock-out if there was no rupture of arteries and quick restoration of normal flow of blood in the brain. If not, there can be permanent brain damage, even death.

Our thought processes depend on continuous uninterrupted subconscious processes. Likewise, an economy depends on the continuous uninterrupted flow of funds that is totally unregulated in the sense that no entity controls or directs the trillions of individual transactions by billions of consumers (both individuals and enterprises) buying their daily requirements and selling their products and services, either worldwide, or at a lower scale in different countries.

The Bleak Friday data indicates the government’s lockdown punch caused chronically reduced demand.

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Central planning, Culture and development, Eastern Cape, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Job creation and unemployment, Lockdown, Township enterprises

The waves societies choose to ignore at their own peril: face masks are the new ‘Heil Hitler!’

Johannes Wessels
@johannesEOSA1

In the last months of the Year of Covid-19, the world experienced a massive resurgent wave. It wasn’t a wave of deaths by coronavirus, but a lockdown tsunami engulfing individual and civil liberties. The excess deaths caused by governments’ decisions to relegate non-Covid health issues to the realm of non-essential treatments, also became more visible for those who had eyes to see…

Another heaving wave – poverty due to the swelling unemployment and enterprise demise that the lockdown measures and the autocratic disruption of economic life brought about – also gained momentum. The impact thereof is certain to dwarf that of the virus itself.

If the worldwide death toll of 1.359 million attributed to Covid-19 is divided by the daily average global death toll of 158 085 (for 2019) and one fills the annual calendar according to deaths by cause, the feared pandemic with its vicious waves is closer to a ripple than a tsunami. EOSA developed a Cause of Death Calendar that shows:

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Buying local, Central planning, Developmental state, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, ECONOMIC POLICY AND STRATEGY, Economic Reconstruction and Recovery Plan, Export-led growth, Job creation and unemployment, Large enterprises, Market economy, Medium Term Budget Policy Statement, Northern Cape, Tourism & hospitality services

Ramaphosa’s bold plan (2): weak on detail, strong on flights of fancy

Johannes Wessels
@johannesEOSA1

Two recent key government speeches gave rise to two important questions:

  • Is the inability of the government to effectively implement its policies & plans (?) worse than its inability to table concrete action plans, underpinned by clear strategies, designs, milestones, budgets and target dates?
  • Why can even Thabo Mbeki see the president is naked whilst organised big business still praises the beauty of his imaginary clothes?

The president’s tabling of the Economic Reconstruction and Recovery Plan (ERRP) was lame and lacked detail, whilst the Minister of Finance’s Medium Term Budget Policy Statement (MTBPS) left one with a feeling there is not much grasp within the collective government on how to prevent SA from slipping rapidly, if not tumbling, down the slope.

Instead of rekindling confidence and inspiration, vague and mixed messages fuelled doubt and a disbelief that the government can prevent SA from boarding the proverbial bus to Argentina (debt default). I put the following three arguments to illustrate this assessment:

  • Will the government stand solidly behind Mboweni’s strategy of freezing public sector wages for three years when they cannot deal with the much easier route to stop financing the effectively bankrupt SAA? Recall also how Pravin Gordhan in 2018 (knowing well that Eskom was not only overstaffed, but the personnel besides overpaid) overruled the Eskom Board and management when they had decided on a zero salary increase as part of addressing the Eskom viability issue.
  • Can one rely (trust would be too much to ask) on the government’s undertaking to reign in public expenditure? This, when they had failed multiple times to table a comprehensive plan on how to deal with Eskom’s debt and the growing debt burdens of other State-owned Enterprises (SOEs).
  • How is the “growth through infrastructure roll-out” approach different from numerous previous attempts – since the days of Thabo Mbeki – to strengthen the country’s economic fibre by infrastructure investments announcements, with the emphasis on announcements?

Flipchart notes or a detailed plan?

The Enterprise Observatory of SA reckons four fundamental problems underpin the ERRP and the MTBPS:

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Anti-business, Black economic empowerment (BEE), Black-owned businesses, Buying local, Central planning, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Entrepreneurial space, Job creation and unemployment, Lockdown, Market economy, Marxist-Leninist ideology, Opportunity tax, Preferential procurement, Township enterprises

Ramaphosa’s bold plan (1): Is ‘buying local’ BEE disguised by a face mask?

Johannes Wessels
@johannesEOSA1

If Ramaphosa’s bold plan to restart the economy was a film, the premiere already proved it’s not an ‘out-of-the-box’ blockbuster that will rake in Oscars for economic growth and sustainable job creation. Growth through state-led infrastructure development XXI is a lame sequel fit for an infamous Razzie award.

Like its predecessor – the lengthy National Development Plan – the Economic Reconstruction & Recovery Plan (ERRP) is a sure box office flop.

The ERRP announced by the president after lengthy consultation processes with big business and big labour states “Non-implementation of the ERRP could lead to loss of economic capacity, including collapse of the supply capacity, consumer and business confidence, the labour market and increased vulnerability of the poor. The overall plan aims to mitigate these risks”.

This script suggests its authors live in a make-believe reality: South Africans, whether tax payers or the growing number of unemployed, know consumer and business confidence and employment are not waiting for collapse through the non-implementation of a plan. It has collapsed already and was meticulously crafted by the very same government now purporting to be capable of getting the economy firing on all cylinders again.

There is a hidden sub-text as well: Covid 19 was the excuse to gain more arbitrary power and programs to recover from the lockdown devastation are aimed at cementing these arbitrary powers.

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