Monthly Archives: April 2017

SA Must Beware New Global Trade Curbs

There are many concerns for the business community in South Africa, but one which is less evident than, say, the political manoeuvres around the Finance Minister is the growing tsunami of global protectionism.

More than once recently, there have been multilateral meetings at which Trump’s US administration has blocked a declaration against protectionism, and both protectionist sentiments around both Brexit and the French elections have shown that this is not just a US threat.

One of the strangest outcomes of America’s AGOA trade concessions to Africa is the difference it makes to a German car manufacturer, BMW.   The detail may have changed since I last researched it, but I am pretty sure that at least for a time BMW was the biggest SA recipient of AGOA benefits.   It has been able to assemble cars in SA, and then to get them into the US market at far lower cost tariffs if they were sent from Europe.  Thanks to AGOA.

The SA government has poured the largest slice of its investment incentive cake into the willing hands of global auto giants.    They get SA benefits to produce the vehicles and then minimal tariffs when they ship them off to the US.

However, AGOA is a unilateral trade concession, at the mercy of the US administration.   And the danger is that Trump will show Africa little mercy.  Ask the Syrians whether or not he is a nice person.

Global trade rules are policed by the World Trade Organisation (WTO), the successor to GATT.  For decades there have been efforts to agree on a new WTO trade round, which would provide additional benefits to SA and other emerging markets.   Most observers believe that Trump’s ‘America First’ philosophy will scupper the current trade round and may ultimately neuter the WTO itself.

Listening to a few recent speeches by SA’s Trade and Industry Minister Rob Davies I have noted his warnings that there is turmoil ahead in world trade, which may be why SA officials are so keen to ensure there is still post-Brexit access to both the UK and the EU.

But what of those investment incentives to which I have been referring, worth tens of billions of rand a year?    Is there much point in encouraging export-focused investment in SA if trade barriers are rising around the world.   If we are to return to a siege economy, and that model did not work too well under apartheid, should we not instead be investing again in siege industries?

Just this week, our beloved President was in the Free State, opening another Special Economic Zone (SEZ) – an area where export-oriented firms can enjoy all sorts of incentives, including a lower tax rate.   Not much point in setting up more SEZs, as the government is doing, unless the export markets remain open and receptive.

It will take much thought and wisdom to chart the way forward, but the first vital step is to raise awareness of the shifts in global trade policy.  It is going to get a lot more scary.

Tweet of the Day

Make your own bacon by tricking a pig into running headlong through a harp.

Frank Whitehouse

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The Great e-Rip-Off.

I am deeply concerned that millions of people may be victims of a discreet but widespread rip-off in the e-world.

I am referring to mugs – like myself – who have purchased digital books and music, and to people who buy data and other cellphone stuff which expires before they can use it.

This has come to me over time, but not before I have spent a lot of hard-stolen cash on limited-access e-shit.

Take an e-book.  They are incredibly convenient.  You can log on – as I have done on countless occasions – to a site like Amazon and purchase a book which can be accessed almost immediately on your Kindle or app.   No postage and packing.    It is there like magic.

But is I it there forever?  Certainly, you can share it with a few friends and family who also have access to your Amazon account.   But can you trade it in when you have finished?   And what happens if you die?   Will it accompany you to Hell?

The problem with e-books is that they are not like real books.  You can’t lend them to friends, or sell them, or donate them to a charity shop.   Their use is limited, restricted.   They can cost a lot of money, but it is for short-term convenience, not for long-term value.   I have similar concerns about digital music and other paid-for e-entertainment.

An even more immediate problem comes when you buy data, or SMSs, or call-time.   Some providers do not let these expire, but the ones I have used do let them expire.  Goodbye.  No refunds available.

The customer purchases something which disappears at the end of the month.   Great for the provider, not so great for the victim.  Terms and conditions will screw you, and I have the financial scars to prove it.

Maybe I am just a sad old cynic who belongs in the Caxton age, but I do feel that the rules and regulations which we mildly accept when we do business with Amazon, or with a cell phone provider, are slanted dramatically against the interests of whoever is coughing up the cash.

Diamonds may be forever.  Data?  Not so much.

 

Tweet of the Day

Jewish Comedians (@JewishComedians):  Rodney Dangerfield: I tell ya, my wife’s a lousy cook. After dinner, I don’t brush my teeth. I count them. | #Quotes

 

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ANN7. In defence of the horrible,

I don’t like what they say…..so I will shut them down.   Ominous words, and a sentiment which has been acted upon by dictators for a long time.   Even today, a shocking number of journalists are murdered around the world for trying to do a good job.

So, when I hear the stupid and thoughtless calls for Gupta TV station ANN7 to be taken off the DSTV satellite service, I recoil in outrage.   A petition?  Do grow up.

I was watching the ANN7 station when Zuma was preparing to announce his Cabinet reshuffle, and they were so ahead of the news that they were the news.   These people were clearly being fed details of the new Cabinet by the Guptas, in much the same way that JZ himself was being fed his instructions.

It may have been a bit devious that ANN7 got its news that way, but good luck to them, say I.  When I was working in Europe I was often on stories alongside some of Fleet Street’s finest.   They would track down the survivors of disasters by ringing hospitals and pretending to be priests or representatives of an Embassy.   They would seek copies of hotel bills by pretending to represent public figures, so they could find details of spending patterns.

Repellent stuff, I agree.    But where do you draw the line?    When one repellent journalist does a massive public service by pointing out how a President milked the taxpayers to build a private residence, or when it was reported that his dying advisor was let out of jail in dire health, only to pop up on the golf course in apparently robust health?   You gotta take the rough edges of journalism if you want the rewards of being informed.

It doesn’t always work.   A recent revelation that former deputy finance minister Mcebisi Jonas was offered hundreds of millions of rand to take on his boss’ job was reported, but not many arrests followed?    Even when juicy stuff is reported, corrupt institutions do not always act on it.    A robust democracy requires a fearless and independent press but also an effective police and judiciary.   We know from dozens of examples that the scale of corruption at the top is mind boggling.  Just because we all know something is wrong doesn’t mean that it will be put right.   It takes more than a long, hot shower to rid a country of the stench of corruption.   But it would be a far harder task without the media, sleazeballs and all.

So, I say it is a small price we will pay if we keep on ANN7, which nobody is obliged to watch, as long as we also keep on the array of independent and effective broadcasters and publications which still expose wrongdoing.  There is an uncanny parallel in the US with Trump attacks on some media outlets.  These are also dangerous, nasty and anti-democratic.

On a similar theme, I have attended a few recent news conferences by our beloved new Finance Minister.    I applaud him for his patience and stamina in listening to a lot of tough questions, and in answering them most of the time.     However, at one recent briefing by the Minister at SARS, one of his flunkies made the repellent suggestion that questions should only be on tax collection matters, and journalists should not deviate from this narrow brief.

Congratulations to the many media representatives who effectively showed the middle finger, and asked what needed to be asked anyway.

And yet we heard the next day that at a loco launch by the president (the loco referring to the front of a train and not to Zuma) journalists were manhandled by Zuma’s bodyguards (who are even larger and more intimidating than his wives).

There may be a power struggle inside the ANC, but there is also a more sinister battle underway between those who believe that a free press, warts and all, is an essential component of a healthy democracy and those whose agenda is neither democratic not healthy.

So, let us keep ANN7 on offer to all who are foolish to accept its dodgy commentary.  At the very least if provides a good laugh for the rest of us, however unintentional.

 

Tweet of the Day

John Darby (@mrjohndarby):  Dr: Does it hurt when I do this?

                                                     Me: Yes, a bit Dr: And now?

                                                     Me: Yes, that’s very painful. Please stop showing me photos of you and my ex.

 

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