State Capture disguises the devastation by anti-business policies: Bafana-Bafana fared better than the economy

The anger because of billions lost through corruption and state capture comes at an enormous opportunity cost. The focus on the Zuma-Gupta-axis acts as blinkers that prevent a focus on the massive cost of adhering to failing economic policies and strategies – a cost far greater than the billions swindled away through corruption.

Three figures show clearly that the economic malaise is much deeper than the damage caused by corruption parasites and that the impact of poor policies started long before corruption landed under Government privilege at Waterkloof. Blaming the economic ills of South Africa on State Capture is a massive over-simplification.

Continue reading “State Capture disguises the devastation by anti-business policies: Bafana-Bafana fared better than the economy”

Advertisements

Cyril on a tight-rope: Paradox, not policy certainty the outcome of the ANC conference

Will the honeymoon breathing space of optimism that the worst corruption is over and that more business-friendly policies and better public spending behaviour be utilised or wasted? With new reports of the ANC’s national executive committee setting wheels in motion to recall Zuma as president, it is important to note that acting against Zuma would still not set enterprise friendly policies in place.

South Africa’s post-apartheid ANC policies and strategies dealing with enterprise development have been largely driven by an increasingly unfriendly framework for established businesses as well as an anti-growth premise. In the final gasps of December 2017, the ANC Conference even took unanimously policy positions that makes mockery of Ramaphosa’s utterances of making growth the priority.

The decisions to endorse Zuma’s announcement on free tertiary education and to change the Constitution to enable expropriation without compensation, provide ample proof the ANC doesn’t understand what is required to ensure growth and to step back from the fiscal cliff.

Continue reading “Cyril on a tight-rope: Paradox, not policy certainty the outcome of the ANC conference”

The economic consequences of Luther: Ideas have legs, but some come with leg-irons

500 Years after Martin Luther hammered his 95 theses to a church door in Wittenburg, Davide Cantoni, Jeremiah Dittmar and Noam Yuchtman saved their theses to the internet: Beliefs have economic consequences.

Old news, one might say, recalling Weber. But Weber’s thesis was always contested: assumptions of cultural traits based on unreliable statistics from the 19th C. Cantoni, Dittmar and Yuchtman (further-on Cantoni and co.) offer hard micro-statistical evidence from the century when Luther protested against Papal authority : 1517 was a watershed year in how people viewed the world and those (world)views had economic consequences.

In a National Bureau of Economic Research Working Paper of October 2017 they state: “the pre-Reformation era can be understood as an equilibrium in which a monopolist religious producer (the Catholic Church) provided political legitimacy to secular authorities at a high price—charged in the form of control over resources, tax exemptions, and some degree of political power. The Reformation represented a competitive shock in the market for salvation. Protestant reformers offered a popular, lower-cost alternative to the Catholic Church… This had implications for the allocation of resources between secular and religious uses…Continue reading “The economic consequences of Luther: Ideas have legs, but some come with leg-irons”

Ready to choose a San hunter rather than a Sherpa guide for mountaineering? Dlamini-Zuma on Radical Economic Transformation

When Nkosazana Dlamini-Zuma announced her Manifesto for Change, she reminded me somewhat of the stern Mother Abbess singing “Climb every Mountain” for Maria (Julie Andrews) in The Sound of Music.

Definitely not her voice, but her words… Dlamini-Zuma summoned support for Radical Economic Transformation (RET): “We must know which hills to tackle next. …(t)hese are the mountain of economic transformation, the highland of land redistribution and the summit that must see us educating and skilling our people. If not, the negatives will swallow the gains we have made.

Mother Abbess

Marvellous libretto…

Continue reading “Ready to choose a San hunter rather than a Sherpa guide for mountaineering? Dlamini-Zuma on Radical Economic Transformation”

A Cyril Swallow does not make a Summer of Growth: How business friendly is Ramaphosa’s New Deal?

We need to massify the creation, funding and development of black-owned small businesses, township businesses and co-operatives.” Cyril Ramaphosa’s New Deal for South Africa (14 Nov 2017).

This quote from Ramaphosa’s 10 point plan manifesto to get the economy growing forms part of the action steps under Point 5: “we must accelerate the transfer of ownership and control of the economy to black South Africans.

At first take the creation of an immense number of enterprises sounds like a pro-business approach. But is this objective realistic? Will it render the desired outcome? Even more basic: is it sound economics?

The New Deal is silent on how this enterprise factory that will mass-produce black-owned businesses would work. Whilst the manifesto was announced in the context of the ANC leadership contest, the “we” that Ramaphosa refers to is clearly Government and its administrative institutions. Continue reading “A Cyril Swallow does not make a Summer of Growth: How business friendly is Ramaphosa’s New Deal?”

Zuma, Gigaba & Zwane contribute to SA’s slippage on WEF’s Competitiveness Index… in “favouritism in public decisions” SA ranks amongst the worst

Were it not for the relative good performance of South Africa’s private sector, the slippage by 14 places on the WEF’s World Competitiveness Index would have been much much worse. And there is strong evidence that Jacob Zuma, Malusi Gigaba and Mosebenzi Zwane each pulled their weight in efforts to contribute to lower rankings on some of the indicators… Continue reading “Zuma, Gigaba & Zwane contribute to SA’s slippage on WEF’s Competitiveness Index… in “favouritism in public decisions” SA ranks amongst the worst”