Let's Talk Afro-Geopolitics III: ANC, Labour, Unemployment and the future of South Africa

[Thabo]

@Thabo - All i'm asking for is caution before jumping to using ISI as a strategy of development given the past issues of ISI. Also, the blog you linked hilariously omitted the fact that ISI development in the majority of the Global South was accompanied by SOEs which caused debt crises. Theoretically, it is possible to have ISI without SOE involvement but it's never done that way in Africa. And you know that the EFF would never link hands with "global white capital" to have that sort of development. They want to nationalize parts of the SA economy after all.

Debt crisis were caused by the oil shocks. Whites don't want Africa to develop so EFF is right to never link hands with them. Natural resources should be managed by SOE's since they are natural monopolies.

 

[The Odum of Ala Igbo]

Debt crisis were caused by the oil shocks. Whites don't want Africa to develop so EFF is right to never link hands with them. Natural resources should be managed by SOE's since they are natural monopolies.

Debt crisis was directly caused by oil shocks but the situation in various countries was the product of taking on debt to subsidize socialist or "nationalist" economic policies with the state as the main economic engine. So I wouldn't blame oil entirely but the country whose elites thought that the government should directly manage every sector of its economy and took on debts to do that.

On the governance of natural resources - I'm more partial to public-private ventures if they're critical resources to a country like Debswana in Botswana.

Btw, Malema appeased white capitalists when he went to London late last year. Hope you can read it:
Africa Confidential | The world's leading fortnightly bulletin on A

 

[The Odum of Ala Igbo]

https://www.google.ca/amp/www.bizne...as-a-hit-with-uk-investors/amp/?client=safari

Malema cavorting with white capital in London, reassuring investors.

 

[Thabo]

Debt crisis was directly caused by oil shocks but the situation in various countries was the product of taking on debt to subsidize socialist or "nationalist" economic policies with the state as the main economic engine. So I wouldn't blame oil entirely but the country whose elites thought that the government should directly manage every sector of its economy and took on debts to do that.

On the governance of natural resources - I'm more partial to public-private ventures if they're critical resources to a country like Debswana in Botswana.

Btw, Malema appeased white capitalists when he went to London late last year. Hope you can read it:
Africa Confidential | The world's leading fortnightly bulletin on A

Only if the private companies are national. Botswana is not the success it is made out to be its wealth is unevenly shared and its HDI is as bad as South Africa's. List of countries by inequality-adjusted HDI - Wikipedia. Malema was establishing networks and making his presence known globally he gave a good speech too

 

[Thabo]

Only if the private companies are national. Botswana is not the success it is made out to be its wealth is unevenly shared and its HDI is as bad as South Africa's. List of countries by inequality-adjusted HDI - Wikipedia. Malema was establishing networks and making his presence known globally he gave a good speech too

 

[Thabo]

Don't know why it wont load but its own youtube.

 

[The Odum of Ala Igbo]

Only if the private companies are national. Botswana is not the success it is made out to be its wealth is unevenly shared and its HDI is as bad as South Africa's. List of countries by inequality-adjusted HDI - Wikipedia. Malema was establishing networks and making his presence known globally he gave a good speech too

I agree with you that Botswana is going to experience a lot of economic pain in the long-run and that already it's suffering from its resource-dependency. I'll peep that Malema video in a bit!

 

[Lucky_Lefty]

Do you think Black Economic Empowerment (BEE) was a failure?

Not a failure but a lot of corruption and enabling of folks with no real business sense or a real plan.

 

[The Odum of Ala Igbo]

I am moving towards the position that the ANC is the only party which seeks to rid South Africa of Apartheid's legacy.

The DA is under the ideological thumb of Western Cape elitists. The EFF are running on brain-dead ideas which destroyed economies like Tanzania, Ghana and Zimbabwe.

 

[The Odum of Ala Igbo]

ISSUES FOR PLATNIUM PRODUCTION in SOUTH AFRICA

Shares in Lonmin tumbled on Thursday after the South African platinum miner reported a “disappointing” start to its new financial year as production declined and it struggled to improve productivity at its operations.

In the three months to December, refined platinum production fell 20 per cent to 137,000 ounces from the same period a year ago when output was boosted by smelter clean up project.

It was a much lower figure than analysts had expected, sparking a 13 per cent fall in the share price. Lonmin blamed the lower figure on labour problems at its Marikana operations where efforts to improve absenteeism stalled.


The output decline was driven by a 13.8 per cent fall in output from K3, its biggest shaft, where Lonmin was forced to deploy additional crews in an effort to boost production.

“The relationship between operational management and unions at this shaft is not working as effectively as we expected, and the yielding of results from the implementation of business improvement initiatives at this shaft is taking longer than we would have liked to see,” Lonmin said in a statement.

Overall output from its Marikana mining operations, which account for 95 per cent of the company’s total, was 7.8 per cent lower in the three months to December than in the same period of the previous year.

As a result of the weak quarter, Lonmin said it was reviewing its capital expenditure budget for 2017 in a bid to stem the outflow of cash from the business. At the end of the year net cash stood at $49m, down from $173m in September.

Since shareholders rescued the company at the end of 2015 with a $400m share sale, Lonmin has been trying to restructure its operations. It cut more than 5,000 jobs last year and managed to eke out a small operating profit.

But it still faces a number of challenges, in particular rising wages and power costs in South Africa. There are also concerns about the outlook for platinum. The metal’s main use is either in autocatalysis in diesel cars or jewellery, both markets that face an uncertain future.

Diesel cars have come under greater scrutiny following revelations of emissions test-cheating software on Volkswagen cars in the US, while jewellery demand in China is slowing.

Analysts said there were few positives in Thursday’s statement. While the company maintained its full-year sales and costs guidance, this was subject to “seeing sustained improvement in production during the year”.

“The company appears to be struggling with a plethora of challenges, and the need for capital cuts to better manage the balance sheet will impact the production profile,” said analysts at Investec. “In effect, Lonmin continues to need a much stronger pricing environment.”

Platinum has risen 8 per cent this year to $978 an ounce but remains below the level of $1,600 it reached three years.

“In the near-term, we do not see Lonmin coming under financial pressure, although, at current prices and foreign exchange rates, we see the potential for a funding squeeze in the medium-term,” said Richard Hatch, analyst at RBC Capital Markets.

In morning trading, shares at one point fell to 25.5p to 152p before recovering slightly. This left the company — once a member of the FTSE 100 — with a market value of £420m.

 

[TTT]

I am moving towards the position that the ANC is the only party which seeks to rid South Africa of Apartheid's legacy.

The DA is under the ideological thumb of Western Cape elitists. The EFF are running on brain-dead ideas which destroyed economies like Tanzania, Ghana and Zimbabwe.

The DA is too hardwired to undo the influence of Apartheid. They try to act slick like non of their voters were not former NP voters as well. I find it interesting that the bulk of their voters prior to 2009 were the coloured population and they still could not penetrate the higher echelons. It took them a while to realize that without a black face on the leadership they would remain a regional party at best. There were signs with Lindiwe Mazibuko that the party was starting to see that opposing BEE in the manner that they did was not a good political look. She had a falling out after she appeared to support some employment equity thing and then left. South Africa and Zimbabwe have some similar trajectories. At independence in Zimbabwe there was political reconciliation ( Mugabe's government even allowed and set aside seats for whites in parliament that gave them up to 20 seats i think ) and then there was a realization that economic power is not voluntarily given up. The ANC actually figured this out even earlier than ZANU and passed BEE even before indigenization that Zim passed in 2008, the thinking of the ANC was that it was in the interests of whites that there is a black owning class as well as a black middle class. Needless to say the preferred methods are based on a market solution e.g. a predominant white firm looking to partner with a black South African empowerment group. It has only managed to benefit those who were already well placed to take advantage and left the bulk of everyone behind. Unless there is a radical shift the pace of change will be like Zim from 1980 to 2000, I dont think the structure of South Africa's economy works well to achieve those changes, they need an East Asian like growth spurt to really transform. The DA's ideas sound like they are being formulated in a mature Western economy( cut taxes, regulations , corruption etc), it almost sounds like they are living in some parallel universe. Leftists over there actually thought Lula's Brazil Bola program was a good thing to follow but implementation as usual would be terrible. The EFF sound like student union leaders , the type of policies they favor sound radical enough to attract young people but looking through them you can already see the holes. Mining has been happening in SA since the gold rush of the time of Cecil Rhodes, they have some of the deepest mines in the world and are already very capital intensive. The only way to capture any value would be expropriation without compensation, paying for the mines would make the whole idea financially bad. Zimbabwe tried a different model by insisting that instead of paying cash for an ownership stake the minerals in the ground count towards the purchase price but as far i have seen the model didn't work because there is no capital to be deployed in the first place. Your article above shows the reason why, gold and platinum while pricey are not oil and even if production shuts down the world can move on. The last part is about land, SA is a very urbanized country because of apartheid spatial planning rendered bantustans economically useless. Many people have no collective memory making a living off the land apart from rural people. They are the ones to benefit from land the most. Some young activists screaming they want land wouldn't last a week of farming if they are not used to it.

 

[The Odum of Ala Igbo]

The DA is too hardwired to undo the influence of Apartheid. They try to act slick like non of their voters were not former NP voters as well. I find it interesting that the bulk of their voters prior to 2009 were the coloured population and they still could not penetrate the higher echelons. It took them a while to realize that without a black face on the leadership they would remain a regional party at best. There were signs with Lindiwe Mazibuko that the party was starting to see that opposing BEE in the manner that they did was not a good political look. She had a falling out after she appeared to support some employment equity thing and then left. South Africa and Zimbabwe have some similar trajectories. At independence in Zimbabwe there was political reconciliation ( Mugabe's government even allowed and set aside seats for whites in parliament that gave them up to 20 seats i think ) and then there was a realization that economic power is not voluntarily given up. The ANC actually figured this out even earlier than ZANU and passed BEE even before indigenization that Zim passed in 2008, the thinking of the ANC was that it was in the interests of whites that there is a black owning class as well as a black middle class. Needless to say the preferred methods are based on a market solution e.g. a predominant white firm looking to partner with a black South African empowerment group. It has only managed to benefit those who were already well placed to take advantage and left the bulk of everyone behind. Unless there is a radical shift the pace of change will be like Zim from 1980 to 2000, I dont think the structure of South Africa's economy works well to achieve those changes, they need an East Asian like growth spurt to really transform. The DA's ideas sound like they are being formulated in a mature Western economy( cut taxes, regulations , corruption etc), it almost sounds like they are living in some parallel universe. Leftists over there actually thought Lula's Brazil Bola program was a good thing to follow but implementation as usual would be terrible. The EFF sound like student union leaders , the type of policies they favor sound radical enough to attract young people but looking through them you can already see the holes. Mining has been happening in SA since the gold rush of the time of Cecil Rhodes, they have some of the deepest mines in the world and are already very capital intensive. The only way to capture any value would be expropriation without compensation, paying for the mines would make the whole idea financially bad. Zimbabwe tried a different model by insisting that instead of paying cash for an ownership stake the minerals in the ground count towards the purchase price but as far i have seen the model didn't work because there is no capital to be deployed in the first place. Your article above shows the reason why, gold and platinum while pricey are not oil and even if production shuts down the world can move on. The last part is about land, SA is a very urbanized country because of apartheid spatial planning rendered bantustans economically useless. Many people have no collective memory making a living off the land apart from rural people. They are the ones to benefit from land the most. Some young activists screaming they want land wouldn't last a week of farming if they are not used to it.

Excellent, excellent analysis.

How can SA achieve East-Asian tiger or (increasingly) East African style growth?

 

[Thabo]

The DA is too hardwired to undo the influence of Apartheid. They try to act slick like non of their voters were not former NP voters as well. I find it interesting that the bulk of their voters prior to 2009 were the coloured population and they still could not penetrate the higher echelons. It took them a while to realize that without a black face on the leadership they would remain a regional party at best. There were signs with Lindiwe Mazibuko that the party was starting to see that opposing BEE in the manner that they did was not a good political look. She had a falling out after she appeared to support some employment equity thing and then left. South Africa and Zimbabwe have some similar trajectories. At independence in Zimbabwe there was political reconciliation ( Mugabe's government even allowed and set aside seats for whites in parliament that gave them up to 20 seats i think ) and then there was a realization that economic power is not voluntarily given up. The ANC actually figured this out even earlier than ZANU and passed BEE even before indigenization that Zim passed in 2008, the thinking of the ANC was that it was in the interests of whites that there is a black owning class as well as a black middle class. Needless to say the preferred methods are based on a market solution e.g. a predominant white firm looking to partner with a black South African empowerment group. It has only managed to benefit those who were already well placed to take advantage and left the bulk of everyone behind. Unless there is a radical shift the pace of change will be like Zim from 1980 to 2000, I dont think the structure of South Africa's economy works well to achieve those changes, they need an East Asian like growth spurt to really transform. The DA's ideas sound like they are being formulated in a mature Western economy( cut taxes, regulations , corruption etc), it almost sounds like they are living in some parallel universe. Leftists over there actually thought Lula's Brazil Bola program was a good thing to follow but implementation as usual would be terrible. The EFF sound like student union leaders , the type of policies they favor sound radical enough to attract young people but looking through them you can already see the holes. Mining has been happening in SA since the gold rush of the time of Cecil Rhodes, they have some of the deepest mines in the world and are already very capital intensive. The only way to capture any value would be expropriation without compensation, paying for the mines would make the whole idea financially bad. Zimbabwe tried a different model by insisting that instead of paying cash for an ownership stake the minerals in the ground count towards the purchase price but as far i have seen the model didn't work because there is no capital to be deployed in the first place. Your article above shows the reason why, gold and platinum while pricey are not oil and even if production shuts down the world can move on. The last part is about land, SA is a very urbanized country because of apartheid spatial planning rendered bantustans economically useless. Many people have no collective memory making a living off the land apart from rural people. They are the ones to benefit from land the most. Some young activists screaming they want land wouldn't last a week of farming if they are not used to it.

Lol whites created BEE not ANC. During 1994 they realized that it would cause civil unrest due to the massive inequality. Blacks don't benefit from it only ANC oligarchs get tenders and shares. Radebe, Ngoako lock horns in sour deal | IOL They were given shares at discount by whites to act as an buffer and took the deal and screwed blacks over.
South Africa will never be like Zimbabwe simply because of its resources and infrastructure it has, as well as the weather and its geography, its too important to the world economy for it to be easily sanctioned and ostracized like Zimbabwe was by the West.
Lol where is this myth that farming is hard come from? These guys get subsidized like crazy and live like kings of taxpayers money.

 

[TTT]

Lol whites created BEE not ANC. During 1994 they realized that it would cause civil unrest due to the massive inequality. Blacks don't benefit from it only ANC oligarchs get tenders and shares. Radebe, Ngoako lock horns in sour deal | IOL They were given shares at discount by whites to act as an buffer and took the deal and screwed blacks over.
South Africa will never be like Zimbabwe simply because of its resources and infrastructure it has, as well as the weather and its geography, its too important to the world economy for it to be easily sanctioned and ostracized like Zimbabwe was by the West.
Lol where is this myth that farming is hard come from? These guys get subsidized like crazy and live like kings of taxpayers money.

Many African countries have resources but when mismanaged they do turn out to be what Zimbabwe became. It is less about resources and more about how they are managed. South Africa's nominal GDP is smaller than Thailand's and it barely grows it by more than 3%, if it is ostracized it would affect a number of its neighbors but it's not like sanctioning China or something. In fact, the Apartheid Government got their nuts in a vice when Western bankers refused to roll over loans after Reagan's veto on sanctions was overridden. There are few countries in the world that one can say are too important to be sanctioned and South Africa isn't one of them. Hell, it reminds of white South Africans who think SA is too important for the world to look on as land reform happens but they are just unaware how foreign policy is dominated by bigger issues and it is difficult for African issues to migrate from the Africa desk of foreign ministries.

 

[Thabo]

Many African countries have resources but when mismanaged they do turn out to be what Zimbabwe became. It is less about resources and more about how they are managed. South Africa's nominal GDP is smaller than Thailand's and it barely grows it by more than 3%, if it is ostracized it would affect a number of its neighbors but it's not like sanctioning China or something. In fact, the Apartheid Government got their nuts in a vice when Western bankers refused to roll over loans after Reagan's veto on sanctions was overridden. There are few countries in the world that one can say are too important to be sanctioned and South Africa isn't one of them. Hell, it reminds of white South Africans who think SA is too important for the world to look on as land reform happens but they are just unaware how foreign policy is dominated by bigger issues and it is difficult for African issues to migrate from the Africa desk of foreign ministries.

Problem is African countries don't trade with each other like Asians do. I think you're missing my point, it will suffer but more like Iran has instead of another Zimbabwe apocalypse.