SARS commissioner Edward Kieswetter’s biggest headache is not the gaping R300 billion crater in tax income this financial year or the growing Everest of assessed losses for companies that will impact negatively on CIT for years to come. His biggest problem is how to convince taxpayers to sustain a government that under the pretext of “a better life for all” has served up a toxic mix of corruption, wastage, mismanagement and anti-growth policies.
In addition, the very same government has doggedly pursued a lockdown strategy not underpinned by much logic that could yield any outcome other than a severe economic disaster with long term humanitarian effects. These effects include shortened lifespans, poverty related deaths, and deaths from medical conditions the government deemed non-essential. The toll of this inept strategy will in all likelihood dwarf the real Covid 19 death toll.
Lockdown has mowed down millions of jobs and several hundred thousand businesses. Those that survived have been severely crippled: they have a radically reduced income, have run up losses or have achieved less than half their previous taxable income.
One recalls the words of Saint Augustine, bishop of Hippo Regius in North Africa, whose theology and philosophy influenced ancient as well as modern thought: “Without justice, what are kingdoms but great bands of robbers?”
Johannes Wessels (@johannesEOSA1) & Mike Schüssler (@mikeschussler)
When president Ramaphosa in his path-forward-to-lockdown-level-3-address-about-announcements-that-would-be-announced-when-central-command-will-be-ready-to-announce-these acknowledged some mistakes and promised that the government would rectify these, it invoked the fear of Russel Ackoff’s f-laws: correcting mistakes whilst pursuing the wrong strategy takes one further away from one’s goal.
Following a build-up of criticism that the severe lock-down was causing havoc to the economy with a GDP contraction in excess of 12% increasingly probable, Ramaphosa announced on 24 May the whole country would move on June 1 to Lock-down Level 3.
The python of state control is still crushing our freedoms
Voila! Progress? The economy could now reboot. Rather déjà vu.
Instead of opening, the python of state control is not releasing its crushing coils around the economy and continues to squeeze the life out of our constitutional freedoms. Jogging on a beach or a family drive in a vehicle through the Kruger National Park is still considered as a far greater danger of spreading the virus than a church gathering of 50 people.
Marianne Merten’s assessment in the Daily Maverick
The management of the Covid 19-strategy has deteriorated to the level of a farcical comedy, comprising announcements by the president that are then (partially) revoked by members of cabinet.
Add the illogical utterances by Cele and Mbalula, the promotion of syndicate smuggling through prohibition measures on alcohol and cigarettes and the prescriptive diktats by Ebrahim Patel on what kind of clothing may be manufactured by textile factories and displayed and sold by stores, and it looks like another performance of the circus of incompetence.
True to form the new show revealed that the ban on cigarettes remains a key strategy in protecting the citizens from the voracious Covid 19 beast. Should the SAPS find at a roadblock (and Cele promised many of these) discover cigarettes, there will be problems: “if it is illegal to sell cigarettes, it is illegal to buy them“, he stated, adding that SAPS has the right to search for such invoices.
And whilst domestic air travel for business purposes appear to be allowed, the hotels or guest houses where business travellers would overnight, remain closed.
Is Covid 19 this government’s Vietnam?
No reshuffling of cabinet by the president, rather a confirmation of the collective nature of the decisions and more calls on the citizenry to obey the lock-down regulations and to persevere in unity that lives can be protected. It reminds of the US leadership that had called for more commitment and perseverance whilst muddling on with the Vietnam war which they knew they could not win.
Is the government treating the citizens like mushrooms on “the Covid 19 pandemic” just as the US government had misled the American population about that war?
Thirty years ago (on New Year’s Eve 1989), FW de Klerk knew that the South Africa was on the verge of massive change. The combined debilitating effects of apartheid’s shackles on the economy (including sanctions) and the impossibility to continue with the disenfranchisement of the majority of the population, prompted him to prepare his watershed 2 February 1990 speech in which he effectively pulled the plug on apartheid.
Will the combined negative legacy of the transformational drag on the economy and the implosion of state-owned enterprises (SOEs) prompt Ramaphosa to discard the ANC’s ideological stance in 2020?
The perception of numerous commentators and business leaders that South Africans should mobilise behind president Cyril Ramaphosa, Pravin Gordhan and Tito Mboweni to support the “good guys” in the ANC to ensure an economic recovery, is not only simplistic: it is utterly naive.
It is also not new. It is a rehash of the theme of the 1970s when the
National Party was assessed as comprising good guys (the verligtes) and bad guys
(the verkramptes)
with many commentators arguing the case to support the verligtes. The person
who eventually took the quantum leap with a definite break with apartheid (F W
de Klerk) was not counted amongst the verligtes. He was seen as rather
conservative and a natural choice to chair the Ministerial Council for White
“Own Affairs”.
Verlig-verkramp focused primarily on how Nationalist MPs were oriented on apartheid. That analysis had no eyes for another fundamental division: The PW Botha approach with the security structures of the military and national intelligence as key players versus those who preferred a civil-oriented approach with parliament in the fulcrum. De Klerk belonged to the latter faction. Botha and the securocrats had commenced talks and interaction with both Nelson Mandela (then in Pollsmoor) and the ANC in exile, but De Klerk was largely uninformed and excluded from these discussions.
Playing whilst the resource base is shrinking…
Verlig-verkramp was an insufficient perspective to detect the person who
would make the decisive break with apartheid.
Now, many commentators and business leaders still cling to the hope for action and clear policy direction, contrary to what is happening in reality. The hope that “Ramaphosa knows what is required” is based on viewing the ANC as comprising a “good ANC” and a “bad ANC” and that the good guys will restore the country to a golden growth path. Treasury’s document on economic policy is clung to as a lifebuoy.
The good guys are
supposedly led by Ramaphosa, Mboweni, Pravin Gordhan and Gwede Mantashe, with
the bad guys
represented by Ace Magashule, Faith Muthambi, Supra Mahumapelo and others.
This cowboys-and-crooks-perspective is naïve. It also fails on at least four grounds.
Instead of a State of the Nation Address brimming with details about the “extraordinary measures” required to realise Vision 2030 or the “difficult choices that will not please everyone” in order to get the economy growing again, president Cyril Ramaphosa’s SONA 2019 Mark 2 was more like a story in the tradition of One Thousand and One Nights.
It
was a missed opportunity.
Not as disastrous as PW Botha’s Rubicon speech of August 1985, but akin to it in the sense that the President doesn’t appear to grasp the dire economic circumstances and the drastic policy and execution mode changes required to address these.
The stories of A Thousand and One Nights originate from the virgin bride Scheherazade who staved off execution the morning after (a fate that befell numerous one night brides preceding her) by enthralling the Persian Shah-ryar through story-telling without divulging the conclusions. Shah-ryar then kept her alive in order to hear the conclusion the next night, just to be enthralled by another story that would not be concluded. SONA 2019 Mark 2 tried to work magic on South Africans, foreign investors and rating agencies by fable after fable without a hint of how this would be fulfilled.
Stark dividing lines on the economy and the future of the country were drawn during the Chairman’s Conversation when Johann Rupert of Richemont, Remgro & Reinet was interviewed by Given Mkhari of the MSG Afrika Group. The Black Management Forum called for controlling the “levers of legislation to determine what happens with capital, opportunities and business prospects” (state control of the economy) with Rupert hinting that “it would be quite easy to lose interest: South Africa has one last chance…”
On talk radio, news websites and social media reactions rolled in, many calling Rupert “racist”, “paternalistic” and even “an arrogant ignorant” whilst others concurred with his comments about the young chasing BMWs and immediate satisfaction, rather than patiently building their businesses and wealth.
The event and the reactions thereto is far more than a storm in a tea cup and one that the whole business community should take note of, as well as every company and politician that had attended the recent Investment Summit.
The contours of the Chairman’s Conversation, the few comments from the floor and the tsunami of social media condemnation reminded me of a period in world history that had changed and influenced (almost) everything since then. My sense is that both Rupert and the BMF reckon South Africa is at the brink of society-shaking change as well. That change does not necessarily bode well for the future of South Africa…
EOSA 