Covid 19: Folly to correct mistakes when heading the wrong way

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? 

Continue reading “Covid 19: Folly to correct mistakes when heading the wrong way”

GDP shrinkage of 12%: It’s not the virus, but the lock-down, stupid!

Johannes Wessels (@johannesEOSA1) & Mike Schüssler (@mikeschussler)

At the end of the initial 3 weeks lock-down a GDP decline of about 5% was considered as quite a catastrophic outcome. Even at that level, it was considered worth the price since delaying the spread of the Covid 19 virus would give a window of opportunity for the health sector to get beds, ventilators and care protocols in place for the spike that would inevitably come.

The minister of trade and industry (dti), Ebrahim Patel, however dismissed the negative projections of economic shrinkage as mere “thumb-sucking”.

After prolonging the hard lock-down with just a gradual easing to level 4 to end May, the growing queues of the hungry waiting for food parcels, the increase in the claims from the unemployment insurance fund and the drastic shrinking of the state’s purse, would make a 5% decline in GDP a dream outcome.

The GDP figures for Q1 2020 will only be known end June. Data from other countries indicate that those whose governments had opted for a hard lock-down are in for excessive economic damage.

Change in GDP trend is the difference between growth in 2019 and 2020 1st quarters, implying that the Philippines that experienced a change of -6% went from 5.9% GDP growth in Q1 2019 to -0.1% in Q1 2020. This chart reveals the following:

  • Countries with a hard lock-down that kept only essential services and providers open, saw an average decline of 5,2% in GDP trend.
Continue reading “GDP shrinkage of 12%: It’s not the virus, but the lock-down, stupid!”

Locked-in on Freedom Day: Proposals for Level 4

Johannes Wessels
@johannesEOSA1

Point of departure

The following is EOSA’s position concerning the lockdown as a measure to combat the spread of the Covid 19 virus:

  • It is false to be locked into the binary notion that it is either about saving lives or about growing the economy. That dichotomy is based on the incorrect assumptions that:
  • economic decline will not have any impact on the well-being of people and that there will be no threat to the wellbeing and livelihoods of people in a contracting and stagnant economy, or
  • a society that is ravaged by a virus that causes overnight the deaths of thousands of entrepreneurs, employers, employees and customers will not have a negative impact on the economy.  
  • EOSA is committed to the guaranteed constitutional right to freedom of movement and choice. The lock-down regulations that nullify these rights are dangerous to more than the lives and dignity of people (think about the abuses by members of the police and the defence force) and the livelihoods of people (the damage to the economy, businesses and the government’s budget deficit). The regulations are in fact dangerous for the well-being of our democracy.
  • A balance should therefore be sought: regulations should promote and protect both lives and livelihoods and all these should be tested against the constitutional guarantees.
  • As and when the constitutional freedoms are impacted upon by regulations (as is currently the case) full disclosure is required so that the premises on which the measures to combat the perceived threat can be evaluated and tested in the court of public opinion.  In addition, parliament and its committees should be seen to be able to exercise oversight on all administrative actions based on decrees issued under the state of disaster.

During full lock-down, the government had not – based on information in the public domain – paid sufficient consideration for the implications of the regulations on the economic well-being of society.  

Proposals for Level 4 (Public sector)

Continue reading “Locked-in on Freedom Day: Proposals for Level 4”

Betting on the “good ANC guys”: Building sand castles in an hourglass

Johannes Wessels
@johannesEOSA1

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. 

Continue reading “Betting on the “good ANC guys”: Building sand castles in an hourglass”

Ramaphorian air spray no longer conceals the stench of a decaying economy

Johannes Wessels
@johannesEOSA1

President Cyril Ramaphosa’s commitment to revitalise the economy reminds one almost of president Zuma’s commitment to combat corruption: spraying air freshener to divert attention from a rotting carcass.

Read instructions on the can for effective application…

The person who promised in his New Dawn manifesto a growth rate of 3% in 2018 through “an unrelenting focus on economic growth” has delivered after 18 months a growth rate of 1.3% in 2018 and negative growth up to date for 2019. Some people would say low growth is still growth, however economic growth below the population growth rate impoverishes the population.

He presides over an economy in worse shape than when he assumed power: one characterised by:

Continue reading “Ramaphorian air spray no longer conceals the stench of a decaying economy”

The City of Surreal Ramaphosa on the banks of the Rubicon

Johannes Wessels
@johannesEOSA1

Cyril Ramaphosa’s vision of “a first post-apartheid city with skyscrapers, schools, universities and factories” (if implemented) has all the potential of becoming a disastrous social engineering experiment wasting resources on a massive scale. Not because the idea of a new city is wrong per se, but simply because the president is ideologically wedded to state-led development, holding a very negative view of the role of the private sector.

Ramaphosa doesn’t consider the private sector as efficient or more effective than the public sector, despite the fact that State-owned enterprises are mismanaged, bankrupt and a drag on economic development with Denel and the SABC even struggling to meet salary commitments.

Peas of the same pod

The creation of such a city is, in the Ramaphosa framework, not a vision of dynamic economic growth, but an ideological blinkered perspective of how government can improve society. Ramaphosa and all the social engineers within the ANC are, in that sense, not far from the approach of Hendrik Verwoerd. The National Party was, just like the ANC, a force pursuing transformation through prescription and limitation of choices.

Continue reading “The City of Surreal Ramaphosa on the banks of the Rubicon”