SA'S FOREIGN POLICY - A THROWBACK TO THE COLD WAR

A previous article in The Economist described South Africa's foreign policy as "clueless and immoral." The influential publication provides broad spectrum objective insight and opinion on global issues with emphasis on economic and political matters. The fact that it has labelled South Africa's foreign policy as "clueless and immoral" is of immense cause for concern. The article, in essence, underscores the ruling party's very limited perspective of the world. For example, the article refers to a recent foreign-policy paper, drafted by the ANC, which asserts that "the fall of the Berlin Wall marked not the freeing of captive nations in Europe but a regrettable triumph of Western imperialism". Further that "the Pro-democracy protests in Tiananmen Square in China were an American-backed counter-revolution". Also, that the conflict in the Ukraine is one "directed from Washington". Ordinarily, the foreign-policy paper should be considered as sheer drivel, but these are not ordinary times. It is evident that South Africa's foreign policy structure is based on two fundamentals: enmity to Western democracies, and reverence for China and Russia. In keeping with its foreign policy, China is now South Africa's strategic ally - a perceived beacon of transformation for South Africa's socio-economic ills. Last year's ANC's national general council document gushes with admiration for China, extolling "the exemplary role of the collective leadership of the Communist Party of China . . . a guiding lodestar of our own struggle. . . a new dawn of hope for further possibilities of a new world order". The ANC has demonstrated a willingness to jump into bed with China, boots and all, irrespective of serious repercussions, such as South Africa's refusal of a visa to the Dalai Lama on China's probable bidding. One of the foundations of a country's foreign policy is to safeguard its national interest. South Africa's radical foreign policy appears focused in relegating its national interest in China's favour. In doing so, such relegation, or surrender, as the case maybe, evokes manifestations of the legendary Pied Piper who offered enticements (preferential trade in this case), and subsequently led his followers to their doom. While this may sound like hyperbole, it, nevertheless, resonates with a warranted cause for concern. The ANC's foreign policy objectives require a comprehensive overhaul, and in particular its predilection in aligning with non-democratic regimes, who, when all is said and done, are driven solely by nationalistic self-interest. According to The Economist, a country's foreign policy requires a balancing act between its principles and national interest. In this respect "South Africa's revolutionary foreign policy serves neither." South Africa's foreign policy will remain "clueless and immoral" until it understands the need to balance its professed democratic principles with national interest.

ZUMA AND THE LAW OF UNINTENDED CONSEQUENCES

A headline recently appeared on the front page of The Times (29/1/16):"We've been Zuma-Ed". The headline was an introduction to apportioning blame to Zuma for firing Nene, causing a currency meltdown, and a hike in the repurchase rate by 50 basis points. According to the article, economists agreed "that president's sacking of Nene was worth 25 of 50 basis points". There will be many who will unhesitatingly agree with the 25 basis point scenario. But fairness dictates further examination: Although Zuma's firing of Nene was arguably a factor (minimalist at best) in the rate hike, quantifying the factor is simply sensationalist speculation. Any self-respecting economist will concur that the overriding reasons for the rate hike include, but are not limited to, falling commodity prices, China's economic slowdown, rating downgrades, decline in direct foreign investment, capital flight and a worsening drought. In hindsight Zuma's sacking of Nene was, in one respect, a blessing in disguise. A rate hike was inevitable - all Zuma did was to accelerate it. In doing so, the rand has strengthened and capital markets have reacted positively. Who knows where the country would be today if the rate hike was later rather than sooner? Zuma's role in accelerating the rate hike is one singular instance of doing the right thing for the wrong reasons. The law of unintended consequences undoubtedly functions in strange ways!

SA'S NEW FAIRWEATHER FRIENDS

South Africa's growth estimates hit a new low this week. The IMF cut the country's growth forecast by almost half to less than 1%. The cut is in line with other estimates, all of which synergistically do not bode well for the economy. One can expect South Africa's growth forecasts to be addressed by the finance minister in his budget speech next month. No matter what remedial steps he proposes, the prospect of averting a recession is a pipe dream. This should not be surprising, but consequentially inevitable. Over time the Zuma government has dismantled the pragmatic economic policy framework that was put in place after 1994. In doing so, his government purposely sequestered the country from Western interests, eroded the private sector, and undermined its democratic institutions, notably the judiciary. While it is true that falling metal prices, coupled with a meltdown in exports to China have adversely impacted the country's economy, the ANC government's chronic mismanagement and structural weakness of the economy, far outweighs the impact from outside economic forces. A timely example is the oil price phenomenon: when most countries are enjoying the benefits of a dramatic drop in the price of oil, South Africa derives no benefit. The country's moribund economy, compounded by the collapse of the rand will not result in a drop in the petrol price. With the government desperately seeking revenue enhancements, one should rather expect the finance minister to announce a tax hike in the petrol price in his upcoming budget speech. The Zuma government cannot sustain the country based on a growth forecast of less than 1% without foreign aid. It's new best friends, China and Russia, are wrestling with their economic problems, and will not step up to the plate. Who else? Western interests and the IMF of course. The American colloquialism, eating crow, may have some particular significance in time to come.

ANC GOVERNMENT & STRATEGIC PLANNING - AN OXYMORON

It was the best of times for South Africa. The country was riding the crest of an unprecedented commodity wave. China's rapacious appetite for South Africa's commodities was seemingly endless. Times were good for South Africa until China's economy went into a tailspin, largely foreclosing its further need for South African commodities. China's deepening economic problems largely eliminated South Africa's free flowing revenue stream from commodity sales. Regrettably the ANC government failed to leverage the good times by not investing surplus monies in job creation through public infrastructure projects, improvements to education and diversifying the economy. Bad economic times are now upon us, underscored by a probable approaching recession, and a further downgrade of in credit rating. All the more reason for government to stimulate the economy, but the coffers are empty due to inexcusable lack of strategic planning. The country's troubled times demand a reassessment of economic priorities. There are signs the ANC government has finally understood the need to rearrange its priorities within its fiscal means. This was evident from the energy minister's comments in Davos regarding the controversial nuclear deal. Can it be the start of good governance, or simply an electioneering ploy? Time will tell, but economic circumstances being what they are, time is a scarce commodity.

SA'S DELEGATION TO THE WEF - A MONUMENTAL WASTE OF TAXPAYER MONEY

The 46th annual World Economic Forum at the Swiss mountain resort of Davos has come and gone. By all accounts the cost to the taxpayer for South Africa's attendance at the event was far outweighed by any tangible benefits. In short, a gigantic wasteful exercise. 51 South Africans including eight government officials, led by President Zuma, attended the event According to Business Tech, the cost to the South African taxpayer for public representative attendees was between US$20,000 and $50,000 per delegate. The total bill at current exchange rates was in the range of a whopping R6.6 million. According to Zuma the delegation's "duty was to put across South Africa as a destination for investment", because "South Africa was open for business". However, no-one was listening to Zuma, or for that matter to any of his cabinet ministers. In fact, investor disinterest was emblematic of poor attendance at South African hosted events. Even more so, when a discussion on South African financial regulation issues was cancelled outright due to lack of interest. Even in "business as usual" times, South Africa has struggled to attract significant direct foreign investment. Pressing the flesh with cap in hand at the get together did nothing to mitigate concerns about South Africa's systemic economic and fiscal problems, further exacerbated by Nenegate. What made matters far less attractive for prospective investors was Zuma's recent signing into law of the Protection of Investment Act which supplanted multiple bilateral investment treaties. South Africa's delegation was further confronted by an unexpected development when Zuma missed a key panel on Africa. His failure to attend an important panel discussion raised questions on his commitment to reviving his country's sinking economy, as well as his understanding in quarterbacking an emerging market economy. Despite the conspicuous lack of investor interest, Zuma's office maintained that the visit to Davos was a success, and "South Africa has been received positively". Probably hyperbolic in light of investor disinterest, but then again some may believe it, but thousands wouldn't!

CORPORATE SOUTH AFRICA NEEDS A KICK IN THE ASS

Corporate South Africa can be a powerful force for socio-economic change. Historically it has preferred not to cause "trouble" in the political arena when none is welcome. Corporate South Africa's deep seated reluctance to engage in political activity manifested itself during the apartheid era. The apartheid regime dictated the role of business in South Africa in no uncertain terms - conform to its rules, and abstain from political activity. Big business was willing to comply out of ignorance, self-preservation, fear, or a combination of the above. Despite the birth of the new South Africa, business remained on the sidelines dedicated to protecting its interests until politics interfered. December 09, 2015, was a watershed day for the business community when Zuma sacked Nene, and appointed a neophyte in his place. Without realizing it, Zuma's actions woke up a sleeping giant, albeit a discreet one. Discreet in the sense that prominent business leaders, understanding the impact of Zuma's irresponsible decision, prevailed upon the ANC leadership, in closed doors, to withdraw the neophyte's appointment. Zuma, bowing to pressure, subsequently replaced him with Gordhan. There are lessons to be learned from the Nene debacle. One overriding lesson is clear: big business can no longer be faint-hearted, or concerned in not wanting to offend the government. Business is an integral component of the business of politics - the two are inseparable. Clearly big business must publicly assert itself by opening the shades of its boardrooms to the light of political reality. In doing so, it's captains of industry must be in the forefront demanding government accountability. It is no longer acceptable for one prominent CEO of a publicly traded company to posit that he does not discuss politics. Not only must he discuss politics, but meaningfully engage with government, by following the example of other CEOs who engaged the ruling party following Nene's sacking. CEOs can no longer be wallflowers or potted plants. Big business is in a unique position to partner with the government to effect change. It must do so immediately, and when necessary carry a big stick, otherwise the country will continue its path to hell in a handbasket.

DO SA GOVERNMENT OFFICIALS NEED ANOTHER JUNKET?

A delegation from South Africa will be attending the annual World Economic Forum at the Swiss mountain resort of Davos from January 20-23, 2016.

Almost half of the African delegation is from South Africa - 51 South Africans including eight government officials led by President Zuma. According to Business Tech, the cost to the South African taxpayer for public representative attendees is between US$20,000 and $50,000 per delegate.  The total bill at current exchange rates could be as high as R6.6 million.

According to Zuma the delegation's "duty was to put across South Africa as a destination for investment".  Not so, and not for the foreseeable future, because of the global economic slowdown, and ongoing domestic social and economic challenges facing the country.  By all accounts, South Africa is edging towards recession in the next quarter. Not the ideal climate for attracting foreign investment.

Even in "business as usual" times, South Africa has struggled to attract significant direct foreign investment.  "Pressing the flesh" at the upcoming event will not mitigate concerns about South Africa's systemic economic and fiscal problems, further exacerbated by Nenegate.

Team South Africa faces a Herculean task.  It remains to be seen if the staggering cost of attendance at Davos was worth the money.

Besides efforts to attract foreign investment, prudence also dictates that government officials, while  in Davos, seize the opportunity to gather information on securing an IMF loan. It may be needed sooner rather than later.

ANC YOUTH LEAGUE - THE DOG ATE THE LEAGUE'S PRIMER ON CURRENCY TRADING

The ANC Youth League (ANCYL) has once again put its foot in its vacuous  mouth. This time it blames Absa, its parent company, Barclays Bank, and Goldman Sachs for South Africa's weak currency.  In doing so, it conveniently ignores the fact that if the likes of Absa and Goldman did not intervene, following Nenegate, the Rand would have suffered the same demise as Zimbabwe's currency.

The rationale according to the ANCYL was to "drive down" the value of the currency, and re-purchase it by pushing up its value "as demand for it increases".

The rationale is fundamentally erroneous, based on ignorance, the companion of the ANCYL.  As the league is apparently composed of young and inexperienced members, a primer in currency trading is appropriate.

In the case of Absa, and/or Goldman,  neither "drove down" the value of the rand.  They did, however, "short" the rand by contracting to sell it at a future date without using any leverage, in the expectation it would depreciate in value.  The decision to short the currency was based on several factors: South Africa's internal problems, China slowdown, negative sentiments to emerging markets, fall in commodity prices, and return to safe haven assets, such as the US dollar and the British pound.  Of equal consideration is the inability of the Reserve Bank to support the Rand - it simply does not have the money to do so.  In essence, a perfect storm for shorting the rand.

Inasmuch as the ANCYL realizes that the nuances of free market currency trading maybe beyond its  learning curve, it should return to less esoteric undertakings, such as joining with older comrades in tearing down the Zuma Must Fall banner off the side of a building in Cape Town.

OBJECTION - ASSUMES FACTS NOT IN EVIDENCE!

Colin Arendse's beef with the DA (Cape Times, January 15) is one thing, but for him to contend that I rushed "to the defence of the under-fire DA" is misguided. In support of his contention he relies on two published letters (January 12 and 13): one entitled "Playing the race card"' and the other "Dripping with irony". The first was a commentary on the ANC's fatuous response to the DA's electioneering poster publicising a political message to the voters. The second focused on President Zuma's lack of credibility and cluelessness. Both commentaries do not in any way, expressly, or by implication, defend DA actions or policies. Moreover, inasmuch as I hold no brief for any political party in South Africa, they are all fair game for praise or condemnation, as the case maybe. Despite differences in political party ideology, they all suffer from the ailments of ignorance, poor judgement and plain stupidity. No party is immune from being identified and excoriated for its shortcomings. It is an elixir for sustaining democracy's wellbeing, to which I do not add bias or prejudice.

MATRIC PREPARATION STARTS IN GRADE 1

The dichotomy in South Africa's educational landscape was again glaringly evident following the 2015 Independent Examination Board and the National Senior Certificate Examination results. This is so because South Africa has two separate and inherently unequal educational systems. One that proudly proclaims across-the-board student achievement, while the other desperately seeks a lifeline in a sea of student mediocrity. Now that the dust has settled, commentators have crunched the general matriculation numbers, and their conclusions paint a gloomier picture than simply a 5% drop in the pass rate from the previous year. The drop in pass rate proffered by the Basic Education Department is meaningless without taking into account the department's technical report. It is no secret that marks were manipulated upwards to offset the thousands of 'promoted' students who, on merit, did not academically qualify to take the National Senior Certificate Examination. These promoted students, plus an additional 40,000 quasi-progressed students, amongst other factors, contributed to adjusted pass mark manipulation. The country's basic educational system is in crisis mode. This was not readily apparent from Basic Education Minister Angie Motshekga's address when announcing the 2015 matric results. Other than announcing a drop in the pass rate, there was little substance in her address. As everyone knows the devil is in the details. The details revealed an extreme drop in raw marks - a development which apparently was too embarrassing for the minister to address. There will be no light at the end of the tunnel unless and until the department gets back to basics in recognizing that the reading, writing and counting foundation for matric starts in Grade 1. Until then millions of our young people remain captive to an appallingly inferior and wretched basic education system.

ONE SMALL STEP. . .

Epiphanies are somewhat rare events and generally follow a process of significant reflection about a problem. Basic education Minister Angie Motshekga recently had an epiphany when she announced that preparing for matric starts in primary school. She has finally understood that matric starts in Grade 1, and the primary school experience is the crucible for academic achievement in later years. At last one small, but significant step appears underway to improve the quality of basic education. However, the sad reality remains that young people now, and for the foreseeable future are stuck in public schools where they learn basically nothing. Consider the likely outcome of the class of 2015 who barely earned a 30% pass mark. What opportunities, if any, await them in the workplace? Also, consider those young people who, because of deplorable standards, are academically unprepared, but nevertheless qualify for tertiary education. The phenomenon of academically unprepared students for tertiary study is not limited to South Africa. For example, the US educational system has a four year undergraduate and a two year associate degree program. Those who do not academically qualify for the four year degree program opt for the two year program. The latter affords a student with the opportunity to complete core subjects, followed by a transfer to a undergraduate degree program for the remaining two years. The associate degree program allows a student to mature academically, and in doing so, dramatically reduce the drop-out rate, and open more spots in undergraduate degree programs. Perhaps a solution for the education/university establishment in South Africa to consider? The deplorable standards for university entrance has created too many students for limited spots. Western Cape universities alone received 100,000 applications for 25,000 openings. The lowering of standards for the matric examination has triggered the law of unintended consequences, but for those students with multiple distinctions, it was not a real test of their abilities, but rather a walk in the park.

JACOB ZUMA - A MOTLEY FOOL

The ANC's 104th anniversary celebrations kicked off with a cake cutting ceremony. President Zuma was joined by party dignitaries and traditional leaders for the orchestrated cake cutting session. It was a happy event in which the party elite and invited guests each enjoyed a slice of actual cake, appreciably dissimilar from generous "slices of the pie" received over the years. The next day President Zuma addressed ANC supporters ". . . on the responsibility to fight corruption and expose corruption and expose corrupt people and report them to law enforcement". On its face a noble appeal, but truth be told, one dripping with irony. According to Corruption Watch the "problem starts with the president" who allegedly personifies public sector corruption. His career is littered with scandals that have been reported time and again in the media. This then begs the question: is the President morally qualified to lecture his supporters, let alone the country, on the issue of corruption? To answer the question would simply be superfluous. As befits one in a starring role, the President was also interviewed by news channel eNCA. He defended his firing of Nene, because "I think the people did not understand. I think there was an exaggeration in terms of reaction. . . There is no single person who can collapse a department, especially a department like the Treasury". As it so happened the President did not collapse a department, but he almost brought the entire country to the brink of collapse. It would behoove the President to heed Abraham Lincoln's warning: "Better to remain silent and thought a fool than to speak out and remove all doubt".

ANC ADDS THE RACE CARD TO ITS INVENTORY

Two DA billboards were recently unveiled in the centre of Johannesburg tellingly critical of President Zuma and the ANC. One billboard features a "live ticker" that specifies there are 1,842,852 presently unemployed South Africans, increasing by one every 112 seconds. The smiling face of Zuma is prominently depicted on the billboard. The second billboard reads "Vote DA for change that creates jobs". ANC's spokesperson, Zizi Kodwa, reacted by stating that the message "expresses the character of a racist party". He further added that in the DA's "narrow view, unemployment in this country is caused by a black government". Kodwa's spurious reaction to the DA's message immediately brings to mind the biblical verse in John 8:45: "Yet because I tell the truth, you do not believe me!" There is nothing in the DA's message that remotely suggests a scintilla of racism. The DA is simply and factually calling attention to real time presently unemployed South Africans under Zuma's ANC government. The fact that the cause for joblessness is a government in power that happens to be black is immaterial. Nothing more, nothing less. The ANC's decision to play the race card is symptomatic of a party scraping the bottom of the barrel, and in doing so, refusing to come to terms with harsh reality - a reality that is drowning the country in social upheaval and economic decline. The ANC government has yet to take responsibility for its actions. It has persisted in scapegoating its failures by blaming apartheid, and has now added the race card to its inventory. The strategy is simply a pretext and subterfuge for failed governance.

SPARROW BRAINS AND MORE

If Penny Sparrow and Chris Hart believed their racist outbursts on social media would qualify them to what Andy Warhol described as 15 minutes of fame, it did not. Rather it qualifies them to a lifetime of infamy reserved for racist bigots and hate mongers. Sparrow and Hart are a reflection of the thinking of a nucleus of white South Africans who experienced the life of privilege under the apartheid regime. The only difference is Sparrow and Hart could no longer contain themselves. Expressing their racism on social media was an emotional release of accumulated deep-seated anger and frustration - a cathartic imperative in the context of challenging social, economic and political conditions in the country. Sparrow and Hart's diatribes are indefensible. They do, however, affirm that racism is alive and well in South Africa. It festers like a blistering skin disorder that can only be treated when all its ugliness is exposed. The racial divide between white and black South Africans did not, as it turns out, undergo a positive metamorphosis after the collapse of the apartheid regime. Racism amongst a nucleus of white South Africans was alive, but overshadowed by rainbow nation exuberance. It simply went underground, and has now surfaced in the form of overt bigoted comments on social media. Those who comprise the white racist nucleus belong to a generation that is dying out. Their racism will die with them. Their descendants, born after 1994, have not inherited the racism of their forefathers and mothers. Therein lies one of the miracle ingredients for a non-racial rainbow nation.

LOOKING A GIFT HORSE IN THE MOUTH

Trade and Industry Minister dropped a bombshell this week when he announced South Africa's possible suspension from the African Growth and Opportunity Act (Agoa). Until Davies' announcement we were led to believe that US concerns would be handily resolved by the December 31, 2015 deadline. The deadline has come and gone, and now Davies and his team are frantically pleading for additional time to conclude an agreement with the US. If not, the impact to the country's agricultural sector will be devastating, resulting in job losses in the thousands, as well as extensive collateral damage to an already faltering economy. Whatever reasons for the current situation, be it neglect, ineptness, intransigence, or arrogance, Davies and his team are to blame for missing the deadline. According to the minister, "negotiations" will follow shortly in the hope of salvaging South Africa's ongoing participation in Agoa. At this conjuncture, Davies is left with only Hobson's choice. If South Africa is excluded from Agoa, Davies must immediately resign, and head for the hills.

2016 - THE BEGINNING Of THE END FOR ZUMA AND HIS ACOLYTES?

Other than intense blowback following Nene's sacking, South Africa's political landscape during December, 2015, was relatively uneventful. So much so, that a scheduled cabinet meeting on the economy was postponed to sometime in January, 2016, because it apparently conflicted with the approaching holiday festive season. One can understand the need for our hardworking president and his cabinet to take time off for rest and relaxation. Nothing was more "deservedly" warranted despite the fact that the country was going to hell in a handbasket. For those unfamiliar with the expression, it is an American allegorical locution describing a situation headed for a disaster inescapably or precipitately. There is no euphemism that nears describing cluelessness of the president and his cabinet, other than shameful, reprehensible and unforgivable neglect and dereliction. Even the prospect of a collapsing economy did not stand in the way of a quad bike ride on the grounds of Nklanda, together with other recreational activities over the festive season. One assumes that as festivity was paramount during the holiday season, reading was not a priority for the president and his cabinet. Assuming this to be so, the latest edition of the highly influential global business magazine The Economist is a must-read not only for them, but for all South Africans. The article in The Economist entitled "The hollow state" must be read in concert with Alec Hogg's review "How world sees SA: Destructive Zuma busy hollowing out the Beloved Country". According to Hogg The Economist has judged Zuma, "and found wanting". Not earth shattering news, but he then adds Zuma "is an ineffective, deeply flawed, economically clueless leader who shouldn't have been let loose on any democracy . . The real question, though, is what will South Africans do about it all when they return from their annual holidays. Will they resuscitate the #Zumamustfall campaign with renewed vigour? Or simply shake their collective heads and allow the destruction to continue?" There is a rule of thumb when offering political predictions - do not, unless one is driven by unmitigated gut compulsion. In this instance compulsion prevails - 2016 will be a year of dramatic change for South Africa, with South Africa's future resonating in the words of Nelson Mandela's favourite poem "I am the master of my fate, I am the captain of my soul". South Africa's fate is in the hands of its people who possess the abiding power to end the destruction.