Democratic Capitalist

Last night I attended a parents evening for a grade 9 subject choice meeting on behalf of my gardeners 15 year old grand-child who we are sponsoring through a decent and reputable government school. (His biological parents have died courtesy of HIV which I believe is relevant for this blog posting because it shows the impact the disease is having on South Africa) .

Interestingly (but unsurprisingly) he failed to pitch to this meeting which he knew had quite a bearing on his future and the potential for him to get into tertiary education.

Anyway I digress…

A couple of interesting things came out of the meeting which I thought was interesting.

• Apparently the Department of Education (DOE) has upped its requirements for those passing from grade 9 into the senior school – grades 10, 11 and 12. You are now required to get 50% in English plus another subject and 40% in Maths and another subject. It doesn’t sound too onerous I guess and hopefully it shows a willingness to up the standards of education across the board. All good and well…

• … that is until one of the teachers told me there wasn’t a hope in hell of that being achieved and if they were to take these standards to heart, less than one quarter of the kids would qualify for grades 10, 11 and 12. To me that was quite scary

• There was a lot of criticism of the math teacher where a large percentage of the students were getting below 30% on their test papers. The head of department and head of school leapt to the defence of the teacher pointing out that because of pressures from the DOE and government a large percentage of the kids passing through the schools had in fact not passed math since grade 2 but were being pushed through the system anyway. Scary.

• Passes and fails for matric subjects themselves were between 30% and 40% - something which brought a chuckle to most of the parents (many who were black or coloured) who remember in the days where you were expected to know more than 50% of the work to qualify for a “pass”.

These are some scary challenges for our youth and for our business environment if these are the standards that are set for the next generation….

How appalling was that treat of South Africa’s medal winning athletes by the politicos yesterday when they arrived at the airport?!

Winnie Mandela and Julius Malema – who I can bet my last dollar – had not heard of Caster Semenya until she won the medal suddenly were parading them around press conferences and helping themselves to the gravy train.

Pardon the confusion but I was under the impression that the celebration was about the achievements of the athletes not a chance for these guys to hog the limelight?

Hopefully it just highlights to the Malema and Winnie Mandela camps that they have little or no interest in other people – they see a populist thing that they can jump on to make sure they can get themselves in the media.

I appreciate that Julius – by his own admission – is not involved in politics (which is a pity considering he supposedly heads up the organisation which is supposed to create the next generation of leadership of the ANC) but maybe he should take a hint from those with a little more knowledge and experience in dealing with the media such as Jacob Zuma. You don’t see him joining the party and making an ass of himself.

The positive thing for the country out of all of this is that with little real leadership coming out of the ANC Youth League this could probably help to further fragment the party and its years of history and quality politicians can be diminished by the antics of Julius…

I make no secret of the fact that I cannot wait for the Bus Rapid Transport (BRT) system to cripple the taxi industry in South Africa.

Truth be told I no longer get particularly angry with taxi drivers when they break the rules of the road. Watching two grown adults forcing a woman off the road using their taxi’s in Randburg just reminds me why I have no sympathy for the day that comes when their taxis no longer ferry people and these idiots are sitting on the side of the road scratching their heads wondering where their livelihoods went.

The taxi driver response to the implementation of the BRT lanes in JHB this week - to purposefully break the law… and THAT is why they are no longer needed.

Even better is their planned “strike” to mark the kick-off of the BRT. If I was the South African government I would be absolutely rubbing my hands in glee at the thought that one of the biggest opponents and transportation systems preventing the BRT being implemented intentionally put themselves out of business to protest opposition.

Guess what you idiots - the end of your industry has finally arrived and for the last 15 years of having to endure your behaviour on the roads we can finally see some light at the end of the tunnel…. and I feel not an inch of sympathy toward you.

Bring on 1 September and PLEASE go on strike - nothing makes my morning more pleasurable than not having to deal with you guys screwing up the roads and the productive people in the economy actually get to work on time. If the BRT can get a pleasant push because you guys aren’t in action it will be even better for everyone involved.

Kind regards,

The Democratic Capitalist!

One of the issues which I get quite aggro about is the number of people in the lower income or non-tax paying end of the market who are involved in service delivery protests. These guys pay next to nothing for water and electricity and yet they are quite happy to burn down the odd politicians house or chase under-performing ward councillors out of the area and then do a fair amount of damage in the neighbourhood to vent their frustrations.

I get irritated because those who subsidise these people - the middle and upper income groups - ultimately carry on paying even if the quality of our service delivery drops.

I’ve been watching the various news sites and I can see a number of suburbs in and around Johannesburg have been without power for the last few days.

One of those suburbs happens to be Kensington which has apparently been without consistent power for the last five days. Surfing around on the internet tonight I found out that some of the residents within Kensington have clubbed together and have started a rates boycott.

The Facebook Group is here and the website is here.

Now this is interesting because this indicates a low-level shift that the middle-class are becoming disenchanted with poor service delivery as well and it could become an interesting game of poker. If these people don’t pay then the city of JHB in this instance could find funds running dry very quickly.

Compound this with the fact that the city of Tswane was reported to be facing a cash-flow crunch (pre all of these municipal strikes) and Moneyweb is reporting that the City of Johannesburg has effectively defaulted on one of its bonds.

If these kinds of movements get any kind of traction then some serious pressure is going to come to bear on local politicians.

How exactly is government going to pay these increased salaries they have promised to municipal workers?

I am going to watch this one closely because I think this could gain some serious momentum … I am just worried about the societal impact. It is going to be very interesting to see how government responds to all of this pressure around service delivery…

I woke up today to find a number of people posting links to the open letter from Clem Sunter to the new chief of police.

A lot of the people were quite complimentary of Clem’s approach and the views he put forward that the chief of police needs to make  a visible dent in the crime which is bruising the international image of South Africa.

While I agreed with the sentiment at which Clem wrote the article, I don’t 100% agree with his recommending a technology driven approach to dealing with crime. Especially when one considers that New York mayor Rudi Giuliani was cited in the article as having been responsible for bringing down the crime stats with this approach.

From the reading I have done, the reason the crime rate came down in New York was in fact attributed to the fact that abortion was legalised a decade earlier.

The end result - you had fewer people competing for jobs, resources and infrastructure. This IN TURN meant that the local police force was able to retain control and begin to start policing the smaller offences and build a culture of respect for the local police and security forces.

A technology driven solution surely cannot be the answer to South Africa’s short-term crime problem. Yes we needed to upgrade things like the DNA lab to ensure swifter prosecution but that doesn’t tackle the problem at its root.

Look through the papers and have a look at how many people from Mozambique or Zimbabwe are arrested in conjunction with cash-in-transit and armed robbery related offences.

I would love somebody to find a statistic to see how many of those in South African jails are either in the in country illegally or are legal refugees out of Zim or Mozambique.

• How many in the townships are here illegally?  It is yours and my tax rands being used to provide infrastructure and security to immigrants. It is these people who have been forced out of their countries to seek work here and ultimately become a drain on the system.
• How many are being treated in government hospitals? Yip the same one which the NHI (a tax on you and I which is going to have to support these people)
• How many are competing against South Africans for jobs and food?
• How many South Africans are having babies they cannot afford to look after but are then being expected to be subsidised by the state (i.e taxpayers) ?

Before you all jump up and down and point out that this is exactly the kind of thinking that led to this xenophobic violence that we saw…. the violence itself was an outlet and an indication of where the real problems lie.

We can tell our cops to “shoot to kill” and we can come up with as many crime stats as we like but at the end of the day, it will come down to supply and demand. The demand for social resources is increasing and the system is cracking - it if far easier to resort to violent crime to just take what you want.

If I had to make some suggestions it would go along the lines of the following:

• Blitz operations on all of the major townships seeking out illegal refugees and having them shipped back to where they come from
• Fast-track their return by employing administrators (job creation) and have them on a plane or train ASAP
• Put the army to work protecting the borders and fill the thousands of job available in the armed forces
• Do an audit of the illegal immigrants that are sitting in the criminal justice system and ship them back to their own countries - let them be somebody elses problem
• Work like crazy to educate and change the cultural mindset that more children = people to look after you in your old age. We cannot be incentivising people to have more children when we cannot afford to support the population as it is now!

Those are some of my thoughts on the subject. Not sure if you agree?

Much has been made of “Human Settlements” minister Tokyo Sexwale and his decision to spend a couple of nights in the townships to try and get a feel for what is happening on the ground.

Interestingly there has been a bit of a mixed reaction to this move. On one hand he has taken a lot of positive “PR” out of the exercise while on the other hand he has been criticised and said that he isn’t getting a real taste of township experience by having all his bodyguards and other services there with him.

A lot of people have accused him of being patronising by undertaking this exercise but I for one believe he has actually shown something of a human face in trying to understand the problems that the township residents face.

Yes everybody has problems and no I don’t think that Sexwale will in the long run give up his luxuries to come back to township life. But let’s be honest if you want big money invested here, it is not going to come from the local residents who want to improve their lot in life. It is going to come from business heavyweights who have deep pockets.

The fact that he is prepared to try and mingle - and experience first-hand - the problems faced in the townships shows that at least he is not one of these politicians who yap on about service delivery from the luxury of their Mercedes Benz or their airconditioned offices.

I know I am harping on about this whole strike season but one inalienable fact that appears to not be getting any real coverage is the fact that jobs are disappearing and the more these demands go up, the faster these jobs are going to disappear.

If you have a look back, we have just gone through effectively 15 years of economic boom time since 1994. Yeah there have been some dips along the way but in the long run, markets have gone up at a rate of knots.

While capacity at various manufacturing and industrial operations have gone up, the number of real jobs created in this environment have not been there and this is a fact that appears to have been wasted on the labour movements.

Business is trying to find ways to substitute labour with automation and this is a trend which is going to pick up in the long run. I have spoken to both local and international CEO’s and while they may very well be talking their own book and looking after their capitalist operations, their intention is to invest more and more in technology which won’t cripple their operations whenever the workforce gets a little edgy.

That means that while those with the appropriate skills and the willingness to develop themselves will benefit, those with manual entry level skills may well find themselves being pushed further out of the job market.

For those who don’t follow the stock market and financial news, you won’t be aware that South Africa’s largest retail bank reported its interim results to June 2009.

I certainly don’t speak on behalf of Absa but I thought it quite interesting to see that they cut 6000 jobs in the last 12 months and they foresee quite a lot more pain in the bad debts on the corporate and business bad debt side for the next 12 - 18 months.

 All the unions etc which are making big demands on their businesses to up their salaries and wages should take serious consideration that many of the businesses that currently employ them may very well not be around in a years time… are you sure you want to be pushing them to give you above inflationary increases?

A 13% increase on a 0 income = ZERO… don’t forget that while you are making your demands.

I was just reading this article on Fin24 where striking workers representing the National Union of Metal Workers (Numsa) have threatened to start cutting power to consumers if their wage demands are not met.

 The quote from the Numsa statement reads: ”Numsa believes that Eskom has a moral responsibility to concede and adhere to the demands of workers… the failure by Eskom to adhere to these demands will leave the workers with no other option, but to adopt radical measures,” the statement said. Numsa said the measures may include the unleashing of a blackout “if need be“.

I thought it was quite interesting to read the comments about the whole “moral responsibility” card being played by the unions.

As far as I know, they have a LEGAL responsibility and obligation not to interfere with the supply of consumer services. I appreciate that a large portion of the Numsa workforce probably don’t have to pay for these services in the same way that ordinary citizens do but by threatening state infrastructure, this would constitute treason surely?

Attacking and damaging power plants would surely be viewed as an attempt at a coup d’etat of some sort and would give the local army permission to protect these national assets?

Again I think it is fair to reiterate that the union leaders are not there to protect the interests of their members.

Just out of curiousity - I see that Fin24 is running with an article about the potential for South African consumers to take some kind of class-action legal initiatives against the likes of Tiger Brands and Sasol for their price-fixing practices.

The article itself doesn’t read very well and seems a bit lame suggesting that government should financially support class-actions against two of its biggest tax-payers - but as a South African consumer, if you were invited to join a class-action lawsuit against these kind of firms (or even the banks) would you support it?

 Taking it one step further - why would you support it?