In a fit of pre-Christmas indulgence I invested in the box set of DVDs of the final five episodes of the Poirot TV series, starring David Suchet. Included is an interview with the actor recalling a visit to Agatha Christie’s Torquay home to meet her heirs, and to win their approval before he finally landed the role. Tellingly, he explains how they insisted that in his betrayal of the fictional Belgian detective, he should always ensure that the viewer laughs with Poirot, not at him. The difference is important. A lovable eccentric is a very different creature to a figure of fun.
Which brings me to Nkandla.
Twitter has been abuzz today with some of the funniest and wittiest material I have ever seen there, following the latest report on our President’s residence. Never has our Head of State been a greater figure of fun. Or it would be fun if we weren’t the ones funding most of it.
Contrast Zuma to Mandela, to whom the nation bade a fond farewell this month. He had his faults, he had a struggle past with which many white South Africans still take issue. But he was a uniting figure, the man who so disappointed all those TV scum who travelled here in 1994, hoping that the country would fall into civil war once the Nationalist Party handed over power to the ANC (with the help of millions of voters). He delivered a rainbow to the nation.
Of course we did not bury the wrong President, as Mandela had reached the end of his natural life, and deserved a dignified farewell. But without a credible and visible rival, it seems pretty certain that Zuma will be back in the Union Buildings, and will not be retiring to Nkandla, after next year’s elections.
Should we worry? It seems that most British politicians who fiddled the expenses system and were exposed by the Daily Telegraph will have paid the price for their sleazy activities, because the system is designed to deal with such behaviour.
However, our own politicians seem to enjoy a ring of protection, not just around their luxury compounds, but around their ability to fund their private extravagance – or that of their families or lovers – from the public purse. In this regard it is indeed disturbing to hear of citizens of this country being uprooted from their homes because their proximity to the Presidential Xanadu. Of course our Head of State and his chickens and cattle and wives and pool guards and tuck shop assistants need protection. But it is how you handle these things that matters. The Blue Light, Blue Label aloofness is unfortunate.
So while Mandela will live on in the hearts of many, Zuma’s greatest legacy is likely to be in the cartoons.
For we laugh at him, not with him

Tweets of the Day:
Famous-Quote.net (@famousquotenet): I want a government small enough to fit inside the Constitution. – Harry Browne
Puns (@omgthatspunny): I changed my I Pod name to Titanic. It’s syncing now.
Funny Tweets (@iQuoteComedy): Are oranges named orange because they’re orange or is orange called orange because oranges are orange?
The QI Elves (@qikipedia): I’ve never had a problem with drugs. I’ve had problems with the police. – KEITH RICHARDS

ZA Confidential is not closing over the festive season but many of our Experts are taking a well-deserved break. So we may be publishing from time to time. The Die Vine Intervention wine tasting podcasts will continue to be posted throughout the break.From, J
anuary, ZA Confidnetial will again go behind a firewall, and will be available in full only to those who subscribe. For a limited period there will be very generous discounts to those discerning folk and companies who take out a subscription for the whole of 2014. For details on subscription rates, please contact: zaconfidential. Media releases, invitations to presentations, and feedback on ZA Confidential can also be sent to the same address. Upgrade your conference or event by hiring ZA Confidential Editor John Fraser as a speaker or MC. Follow us on twitter: @ZAConfidential and/or John on @clasfras1

Many shops will be closed on Sunday, when Nelson Mandela is laid to rest. Some will stay open. PicknPay will donate its profits to charity. Some opened, others didn’t, on Tuesday when the Mandela memorial service took place. ZA Confidential has been asking whether government or organised business should have taken more of a lead in orchestrating the closures? What do our experts make of it all?

Professor Raymond Parsons from BUSA:
My personal view is that this sad but truly remarkable moment in South Africa’s history has been more than adequately recognized by the country in general and by business in particular during this highly emotional period. It created an all too rare opportunity for organised business, through the AHI, BUSA, BBC and BLSA, to cooperate by arranging a joint memorial service to collectively recognize and salute the enormous contribution which Nelson Mandela made to stability and progress in the early years of democracy in SA. It nonetheless is not possible in these unusual circumstances to impose monolithic arrangements on everyone. Given the fact that the events have been spread over several days, it is inevitable that stakeholders like business will also want chose when and how to tangibly do justice to the tremendous debt they owe to Madiba. This includes the widespread commitment by many individual businesses to shut down this coming Sunday for the funeral, which is unprecedented in the business history of SA.

Massmart’s Grant Pattison:
I suppose the government could have declared a national holiday, but that doesn’t preclude businesses from opening on a holiday. Business is precluding from working together on co-ordinated behaviour by the Competition Act. I think leading businesses have led by making their decisions to close public.

Mario Pretorius from Telemasters:
The Memorial event seemed to have been pitched primarily at the international audience. No mourners bussed in from faraway places, no speeches at community centres by every cabinet minister, nor a national holiday called. Perhaps the lacklustre planning is indicative of a loss of contact between the servants in government and their masters in the electorate. The tin ears of e-toll and other foibles deemed co-ordination unnecessary.

Conclusion:
The passing of Madiba had been long expected, and there was plenty of time to plan. Maybe one lasting way of paying tribute will be by having an annual day of remembrance –with commercial closure. No new holiday would be needed; an existing one could be re-named. One final thought is that those with the power such as government and the Mandela family may not have had enough respect nor compassion for the ordinary people. Take the example of the citizens wishing to pay tribute to Madiba as he lies in State. Why on earth was there not 24-hour a day access, as there would have been elsewhere in the world? Failure to provide enough time for the millions who did not get to say their last farewell to Mandela will not be easily forgotten.

Tweets of the Day:
Jay (@jaymeisterrr): ‘I TOTALLY UNDERSTAND WHAT YOU JUST SAID.’ ~ me, lying to an Australian

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One could be forgiven at this emotional time, with the country and the world saying farewell to Nelson Mandela, for forgetting that there has been some important economic data out this week, sending mixed signals. Yesterday we saw a tiny, almost insignificant, rise in employment. Today’s data shows inflation is down and retail sales are limping along.
What do our experts make of it all?

Loane Sharpe from Adcorp (on the employment numbers):
Although, on the face of it, employment improved in the 3rd Quarter of 2013, the labour market remains weak. The number of formal sector workers was roughly flat (+0.2%) over the past year. Over the same period wages (which grew 5.8%) increased by less than the inflation rate (6.0%), with the result that workers’ real (i.e. after-inflation) monthly earnings declined by 0.6% – the first real decline in over 6 years. Real wages are an important leading indicator of employment and/or unemployment: as real wages rise, the demand for labour declines, and vice versa. It is therefore alarming that real wages increased by 5.3% above inflation in the beleaguered mining industry and by 4.2% above inflation in the challenged and highly labour-intensive wholesale and retail trade sectors. Nonetheless, real wages declined in electricity (-5.6%), transport and communication (-1.0%), financial services (-4.0%) and the government sector (-1.7%), and these declines are expected to continue during 2014 as formal sector employers economize on their use of labour by automating and mechanizing their operations. As yet we have not seen the much-predicted decline in temporary employment, despite the impending promulgation of several amendment bills. These bills seek to force employers to pay temp workers the same remuneration and benefits as permanent workers. They also seek to allow temps to make labour relations claims against, not the labour broker which was the position before the amendments, but against the labour broker and its client jointly at the CCMA and Labour Court. What we are observing in the industry is the permanent staff packages are being reduced to temps’ (lower) levels, rather than the way government intended. Also, we are observing that clever commercial contracting will allow companies to flout the new laws around the so-called joint and several liability of employers and labour brokers. We continue to expect that the impending labour law amendments will have no effective, and possibly a positive effect, on the use of large and reputable labour brokers as small labour brokers are increasingly driven out of business by the laws’ additional red tape.

Ettienne Le Roux from RMB (on inflation):
Finally some good economic news: at 5.3% in November, CPI inflation is at its lowest level in over a year. Over the month, the index essentially remained flat (up only 0.1 percentage point), with small price increases for a variety of goods and services just about being neutralised by a 2.2% drop in the petrol price, and further price declines in the case of telecommunication and certain alcoholic and non-alcoholic beverages (just in time for the festive season!). Encouragingly, core inflation (CPI minus food, petrol and energy) remained flat at 5.3%. While inflation is unlikely to dip much further, August probably marked a turning point when CPI peaked at 6.4%. Expect CPI inflation to average around 5.7% this year, easing to about 5.5% next year, which is still too close to the upper limit of the target band to expect the SARB to cut rates. Risks to keep an eye on are obviously the currency, unit labour costs and drought-like conditions that still prevail in some parts of the country.

Nedbank Economic Unit (on inflation and retail sales):
CPI Inflation:
Annual consumer inflation decelerated to 5,3 % in November from 5,5 % in October, in line with our expectations and marginally below the consensus of 5,4 %. On a monthly basis inflation increased by 0,1 %. The major contributor was food, while the drop in the petrol price helped contain the overall increase. The latest figures confirm that inflationary pressures remain relatively benign despite rand weakness. Inflation is expected to average 5,8 % this year compared with 5,7 % in 2012 and then to ease to 5,5 % in 2014.
Retail sales:
Annual growth in retail sales improved to 1,3 % in October after slowing to 0,1 % in the previous month. The rise was almost in line with the consensus forecast of 1,2 %. On a monthly basis, sales remained weak, falling by seasonally adjusted 0,4 % after dropping by 0,8 % in September. Households are likely to remain cautious of spending on non-essential items in the months ahead given the current unfavorable economic conditions. The weak retail sales numbers together with the inflation data released earlier today, suggest that demand pull inflation remains contained, but upside risks remain due to a weaker rand. We anticipate that the Reserve Bank will maintain its accommodative monetary policy stance well into 2014.

Conclusion:
Ropey retail, stagnant job growth and lower inflation do not point to a bustling economy. 2013 is going to be a poor year, and we can just hope that thinks start moving again next year.

Tweets of the Day:
Grant Lee Getkate (@GrantGetkate): Went to a tupperware store the other day. Couldn’t contain my excitement.

ZA Confidential is e-mailed to subscribers. For details on subscription rates, please contact: zaconfidential@gmail.com. Media releases, invitations to presentations, and feedback on ZA Confidential can also be sent to the same address. Upgrade your conference or event by hiring ZA Confidential Editor John Fraser as a speaker or MC.

At one stage it looked as if the latest session of World Trade Organisation (WTO) negotiations in Indonesia was doomed to failure, but word arrived at the weekend that a deal had been struck. Despite some flaws, there is now a new trade deal, moving away from protectionism and towards liberalisation. This comes after more than a decade of failure. Detailed assessments will no doubt arrive in time, but we sought some initial reactions from some of our experts.

Former Trade and Industry Minister Alec Erwin:
It is pretty clear that this is a holding job, and a very necessary one at that! They have basically dealt with the issues that affect the developing and least-developing countries that are not of fundamental importance to the developed or the BRICSA-type countries. I am not sure what the precise content of the trade facilitation text is but that could be important for all. I also cannot see the planned work program ahead. The big elephants in the room – industrial tariffs and further agricultural liberalization have been left once again. So in short they have moved along the development path but have not been able to address the rapidly changing balance of power in the world economy, which requires a pretty fundamental look at the key issues of industrial tariffs, agriculture and services. The Doha Framework, whilst a good one, is rapidly becoming outdated with this new balance of power. However the fact that they were able to reach a range of agreements is a very positive step that they need to build on in order not to entirely loose the momentum of the WTO – which is the real protection against the maxim of ‘might is right’. The new kids on the block in this regard are groups like the G11 around industrial tariffs (SA being a part of this). The ‘might is right’ regime will hurt the least-developing and most African economies the most!

Professor Raymond Parsons from BUSA:
The draft global trade deal now struck by the WTO is good news for the world economy, as well as for SA. Whatever the trade obstacles that still remain in the spheres of agriculture, industrial tariffs and services, it is in the interests of small emerging economies like SA that an international negotiating forum committed to multilateral agreements exists to ensure enforcement of their trade rights. An effective rules-based multilateral system remains essential to underpin the world trading system and to help level the playing field. The latest WTO accord may also extend the already protracted negotiations on the Doha Round, which SA and other like- minded economies have been seeking to influence over the past few years. It at least provides time for the WTO and its members to see whether they can reach fresh accommodations which will strengthen the WTO’s ability to respond to the changing economic and business environment of the last few years. The WTO has now been given a new lease of life and it up to its member-countries to make the best use of it.

Peter Draper from the SAIIA (writing from Indonesia):
I think the deal is justifiably described as the best thing that’s happened to the WTO in decades. In fact it’s the first substantive deal the organization has delivered. That is also positive in terms of its implications for wrapping up the Doha round in some form, which is the next big hurdle the organization confronts and will be the focus of renewed and revitalized effort over the next year or so. Even though it is a relatively limited deal, the trade facilitation component in particular will have substantial, positive implications for traders around the world since it will lead to more automated customs processes and a renewed emphasis on authorized economic operator systems – implying less intrusive inspections regimes down the line. I think this is good for SA, not so much because we need this kind of fillip but more because our neighbours will have to pay it serious attention. That may of course lead to implementation problems, but the deal caters for external assistance. I don’t think the other elements of the deal are much to write home about since they don’t really have substantive implications for us. With the exception of the food purchase programme which the Indians held out so long on. I’m told that SA has a similar scheme and therefore can take comfort that it will be legal for at least another four years. (I wasn’t aware of this so I can’t comment on the accuracy.) But for the Doha Round it also gives developing countries some purchase to secure actual elimination of export subsidies and disciplines on US food aid, since the EU and US respectively want these food purchase schemes to be disciplined. That provides some hope of an overall package incorporating agriculture and industrial tariffs, although I think the latter will remain particularly difficult.

Martyn Davies from Frontier Advisory:
The WTO is battling to remain relevant. I would say that this deal is by no means the big achievement that it is made out to be – rather an “easy win” that did not take much compromise at all from its wide membership base. The future of trade liberalism lies in regionalism, not global multilateralism.

Former SACCI CEO James Lennox:
The deal seems to be an agreement to further talks over a number of years to address issues such as food supply. Trade facilitation advances will probably be offset with additional “national security” requirements, resulting in less than hoped for benefits. Any growth opportunity for agricultural products from developing countries will potentially be reduced by high tariffs imposed on increased volumes. Bi-lateral and regional trade agreements between major trading blocs will continue to throttle growth opportunities for LDC’s and small developing countries – making the WTO even more important at a time of its declining influence. Multinational companies and any distorting effect they have on national and international trade also needs to be considered when considering trade agreements.

Ian Cruickshanks from the SAIRR:
It is interesting to see how long it has taken to reach the first trade agreement since the founding of the WTO in 1995. However, we have seen the Doha Round of talks with 12 years of trying to level the playing field between poor and rich countries, so a move to limit agricultural subsidies and hold stockpiles off the markets should provide some greater certainty for the marketing of products from the least-developed countries. However, I think that many of the major players in the WTO have been motivated by fear of alternative regional agreements. Considering their own snail-pace advances, definitely this is a boost to world trade. However the possible 1 trillion dollar benefit may be over-optimistic. These changes will take months and possibly some years to be fully effective, but it is a move to assist emerging markets like SA whose economies are skewed toward base commodity exports. Markets should be supported by this agreement, but may not necessarily be expected to improve.

Miyelani Mkhabela from the Antswisa Management Group
The World Trade Organisations (WTO) outcome is a great achievement by 159 member nations to have signalled until they reach trade consensus and overlook minor regional challenges and differences. The WTO is the only global organisation dealing with trade rules between nations. The Indonesia agreement will resuscitate or asphyxiate the value of the WTO and make effective of their length and complex trade agreements. The agreement will also fulfil the principles that trading countries shall not discriminate between its trading partners, it should also not discriminate between its own and foreign products and services, lowering trade barriers is also one of the primary ways to encouraging trade and the discouragement of unfair practices will advance and mainstream the participation of developing economies that includes South Africa as well.
South Africa is trading mainly in mineral resources, agricultural products and other resources will benefit from the agreement. Economically, the disagreements in agriculture will continuously be witnessed as countries seek global competitive advantage within the sector and developing nations proved to use agriculture as their area of focus mainly for economic development. Trading nations and national domestic trading stakeholders will welcome the progress made by the conference 2013. The global community needs the WTO and other trade agreements between nations are guided by it. Trade Processes and other systems will change the normal operations of the world trade countries, chambers and producers will have to change slightly and this will add value in weakening trade barriers. Producers from emerging economies struggle to trade their products and the non-consensus discouraged fair trade for the past 17 years since World Trade Organisation formation 1 January 1995 and the outcome is a new practical formation in principle of the WTO and we anticipate flexible trading between developed and developing nations and also a symbol green leafs of the global economy to grow.

Conclusion: As is always the case with these deals, it is a compromise, and has some gaps and flaws. But for once let us consider the glass to be more than half full. Bravo WTO!

Tweets of the Day:
TRobert Stacy McCain (@rsmccain): Obama has a web site that doesn’t work and drones that kill people. Amazon has a functioning web site and drones that deliver gifts.
Funny Tweets (@iQuoteComedy): I need a 6 month vacation, twice a year.
Lynne McCarthy (@LynneMcCarthy): I don’t take orders from anyone. Which is most probably why my restaurant went bust.
Jay (@jaymeisterrr): Still trying to comprehend how it’s already 2014 in Australia.

ZA Confidential is e-mailed to subscribers. For details on subscription rates, please contact: zaconfidential@gmail.com. Media releases, invitations to presentations, and feedback on ZA Confidential can also be sent to the same address. Upgrade your conference or event by hiring ZA Confidential Editor John Fraser as a speaker or MC.

Since our earlier newsletter, we have received further thoughts on Nelson Mandela’s Economic legacy, so it seemed worthwhile to publish them in a separate newsletter. Here is what some more experts had to say….

Nedbank CEO Mike Brown:
Madiba led South Africa from a closed state back into the democratic world and this allowed our economy to become part of the globalization trends that started in the 1990s.The South African economy of today has been a major beneficiary of our democracy for which we thank the father of our rainbow nation.

Peter Attard Montalto from Nomura (from his daily mailing):
Mr Mandela’s job while he was President was to build a nation, unite its people and secure its foundations. In this he was successful. In matters economic he took a number of key decisions before entering power, such as the rejection of the previous ANC policy (from the Freedom Charter) of nationalisation of industry, and realised the need for a more pragmatic social-democratic, liberal form of economic policy as opposed to the more hardline socialism (or even communism) promoted by many in the ANC. However, while in power much of the key economic policy making was done under the leadership of then Deputy President Thabo Mbeki and, as such, criticisms about the lack of infrastructure investment at the time and other issues should not be placed at Mr Mandela’s door – he was busy building that nation. One of the areas where there is a question mark, however, is around the decision to create a cadre of rich black empowerment businessmen who were not industrialists or really (if we are honest) job creators. The choice here was complex, and based partly on the need to create at least the perceptions of rapid sharing of wealth even if Mr Mandela knew it would be impossible to create true equality more widely. However, loyalty to the party which pushed hard on this issue was also partly to blame. The result is still evident today and is being further compounded by the government, whereas in our view a more widespread form of empowerment through families of workers and local community would probably be more appropriate. Under his term in office, however, inequality did fall and key policy decisions were taken which reduced absolute poverty quite sharply. This legacy, however, is now at risk. Inequality and unemployment have risen since, education standards stagnated after an initial surge, underlying growth has been very weak at only around 3.5% vs its theoretical potential to be 5.5-6.0% under the right policy choices, and this in turn has held back development. More important, however, is that the quality of leadership, and in particular its adherence to and respect for constitutional democracy, has faded to be now well short of Mr Mandela’s legacy. This has been seen most recently in the ugly racial language used by the ANC in the current election campaign – language we believe reflects an ongoing seam of real belief in the ANC of black domination and not simply election stump rhetoric. We should never forget that Mr Mandela fought as much internally against black domination as he did externally against apartheid suppression.

Frans Cronje of the SAIRR:
It was largely Mandela’s influence that saw the ANC abandon the afro-socialism that the party had advocated through the latter years of the apartheid system. In embracing markets and allowing for relatively conservative macro-economic policy Mandela allowed the rebuilding of the South African economy. This is a poorly understood fact but one that in our opinion was more important even that his investments in reconciliation.

Miyelani Mkhabela –Strategist and Analyst – Antswisa Management Group
It is with economic sadness the sudden passing of the First Democratic President of the Republic of South Africa who has throughout dedicated and sacrificed his life for the emancipation our nation and he will be remembered for generations to come. Mandela symbolises good leadership traits that South Africa lacks currently and his vision, values, integrity, character, charisma and selfless principles economically positioned South Africa to be a global player. Mndela played a key role in the economic development of the nation and his term policy Reconstruction and Development programme (RDP) highlighted economic majors that need attention to be addressed in our society. Africa in general benefited from the visionary leader of his calibre and his sense of economic choices. South African economic, fiscal and monetary policies have a positive foundation, and his passing will not affect the economic system of the nation. The current national leadership, former Presidents, ministers and the South African citizens together has a responsibility to assure the international community for the economic and political stability. Economically I have surety that the country’s policies with regard to foreign trade agreements are not going to be affected by his passing and South Africans will continue to unite. Tourism will continue to boom and related industries will benefit as well.

A great South African, and probably the greatest ever South African, has left us for a new walk to immortality. I drove past Mandela Square this morning, and it occurred to me that this is now a memorial – to a man who many believe united our beloved country. But what of his economic legacy? Before he brought the ANC to government, there were fears he would be an anti-business leader, a communist sympathiser much closer in ideology to Fidel Castro than to Margaret Thatcher. We asked some of our experts for their views….

Dennis Dykes from Nedbank:
Nelson Mandela leaves a number of important legacies, but his main economic legacy was to settle business and investor nerves in the post-apartheid period by adopting a pragmatic rather than an ideological economic policy approach. He kept an open mind and it is often said that he was persuaded to follow a more market-based approach after discussions with global business and political leaders at the World Economic Forum in Davos in 1992. However, this did not mean that his compassion and concern for the poor and social justice was in any way diminished, with his government starting the strong drive towards addressing backlogs in areas such as housing, sanitation, education and health. Of course his status as a global icon also helped to market South Africa as a tourist and investment destination. His capacity to build national unity through actions such as those at the 1995 rugby world cup also helped build confidence in the new nation. In 1996, a health scare sent the rand tumbling, again underlining his central role. His economic legacy is significant and we need to reflect on how we can recapture some of that national unity of purpose that he espoused to grow the economy and address continuing inequalities in our society.

Neren Rau from SACCI:
It was definitely yet another demonstration of extraordinary leadership that Madiba succeeded in balancing the difference ideologies and political pressures within the Alliance to deliver a balanced approach to the economy.

Dawie Roodt from the Efficient Group:
The ANC morphed from a socialist-orientated liberation organisation into a neo-liberalist political party during the early 1990’s. This was fortunate for SA, a huge political change AND a significant change in economic policies may have been too much for this new democracy – Nelson Mandela was most likely the driving force behind this change of heart. In recent years, however, the true colours of the ANC with its socialist tendencies are reappearing again. Mandela was a pragmatist that was prepared to suppress his own ideological beliefs for the good of the country.

Frans Cronje from the SAIRR:
It was largely Mandela’s influence that saw the ANC abandon the afro-socialism that the party had advocated through the latter years of the apartheid system. In embracing markets and allowing for relatively conservative macro-economic policy Mandela allowed the rebuilding of the South African economy. This is a poorly understood fact but one that it our opinion was more important even that his investments in reconciliation.

Writer David Bullard:
Madiba had little influence on economic policies other than to put finance into the safe hands of Trevor Manuel. Now the commies rule.

Nedbank CEO Mike Brown
Madiba led South Africa from a closed state back into the democratic world and this allowed our economy to become part of the globalization trends that started in the 1990s.The South African economy of today has been a major beneficiary of our democracy for which we thank the father of our rainbow nation.

Raymond Parsons from BUSA:
It is difficult to find new words to describe the massive contribution which Nelson Mandela made to stability and progress in SA in the early years of democracy in SA after 1994. Whatever his initial ideological points of departure he soon put a strong stamp of pragmatism on economic policy and reached out to stakeholders like the business community to help undo the legacy of apartheid. An early visit to the World Economic Forum in Davos gave him new insights into an global economy from which he had been excluded for so long. His crucial support of the creation of Nedlac in 1995 was, through social dialogue, to provide the socio-economic dimensions of the reconciliation and nation-building to which he was so deeply committed. His pragmatism in economic matters at the time went a long way towards creating the consensual stability needed to underpin investor and business confidence in the formative years of SA’s new democracy. Already in 1996 he said in Parliament that SA needed a longer-term shared vision if it was to fully unlock its real economic potential and create a better life for all, a vision which his one-term Presidency unfortunately did not make possible. SA is still struggling to find this shared vision under the aegis of the latest National Development Plan and to rediscover the values that will make it possible.

Mike Schussler from economists.co.za
Yes I believe that the Mandela administration lead us to a more free economy and we have seen growth improvements over the fifteen years to 2008. Mbeki was essential in this; as was Trevor Manual, Derek Keys, Tito Mboweni and others. But of course the start was Nelson Mandela accepting that a generally mixed economy with a free market leading the way would be best. He also calmed everything down and business stayed and built the economy as did many thousands of entrepreneurs – some of whom had worked for the state before and then found that they had talents beyond paper work. I think if one looks at the adjustment at the time it was clear that labour productivity increased and capital costs declined, making the cost of doing business here much less until about 2007 when it started increasing again. The State Debt was reduced and the civil service became less until 2004 when it started increasing again. Reconciliation was as important to the economy after many years of mistrust and hate. Economies only grow when we have certainty, and his administration brought certainty.

Craig Pheiffer from Absa Investments:
The birth of democracy opened up the world to South Africa and brought with it both the good and the bad of being a member of the international economy. In the honeymoon years we did a lot that was right in maintaining the independence of the central bank, growing the pool of taxpayers, improving the efficiency of the tax system, balancing the national budget books, growing our foreign reserves and reducing our sovereign debt levels. Thanks to our glorious transformation we could also witness World Cup Cricket, Rugby and Soccer on our very own shores. Our markets attracted foreign investors and our domestic asset managers could invest larger and larger sums of money offshore. The downside to being part of the global economy has been the vagaries of foreign capital – easily being withdrawn when our domestic growth has stuttered or when emerging markets have collectively wobbled. But things have gone a little awry in recent years as the countercyclical fiscal policy has widened our Budget Deficit and increased our sovereign debt. Our currency has depreciated sharply and our current account deficit has widened as we struggle to keep growth at 2%, never mind 3% or the much higher levels of growth required to create sustainable employment. These have generally been tricky times for policy makers around the globe but we need to honour Madiba’s legacy by investing in our future through education and eliminating all of those labour market obstacles that are restraining our rate of growth from moving to a higher plane.

Conclusion: Mandela set this country on the right path. But if Malema ever gains real influence, Madiba’s economic legacy, as well as his legacy of tolerance and inclusiveness, would be in terrible danger.

ZA Confidential is e-mailed to subscribers. For details on subscription rates, please contact: zaconfidential@gmail.com. Media releases, invitations to presentations, and feedback on ZA Confidential can also be sent to the same address. Upgrade your conference or event by hiring ZA Confidential Editor John Fraser as a speaker or MC.

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