Wednesday, January 27, 2016

Seizing the moment

And finding the Phoenix in the ashes of scorched sentiment.

It was raining when I went to bed on August the 31-st, 1968. We lived in a flat in Cotswold, within walking distance of the SABC’s Port Elizabeth news office. It was a good sleep, as one has with the hypnotic sound of falling rain. The shrill call of the phone ended it, with the caller asking me to stand in for his reporting shift because his car was “flooded”.

It was the first inkling of a torrent that saw 600 mm fall in 12 hours – an event permanently etched in my memory. Those hours have gone down in history as still the worst natural disaster ever to hit a South African city. My own contribution to those annals, captured on a Super-8 Cine camera, can be seen at this link.

And so another of my life’s experience provides a fitting analogy for our times – being distracted by the immediate, the petty and personal while the world around trembles in tectonic shifts. We sleep while floods rage around us. We get caught in our own discord and squabbles, without feeling the earth shake beneath our feet. When we do feel it, we blame someone close; someone visible and identifiable.

Journalists, including wizened old hacks like myself, have a penchant for hyperbole; ever in search of mesmerising headlines. I have the conflicting personality traits of the paranoid idealist, trying to find the Phoenix before there are ashes. But there is a growing sense that seldom, if ever before, and certainly not in my time, has the world experienced an economic transformation of the magnitude and significance as that of this era. Reflecting, as columnists do, much of the more knowledgeable, insightful and leading thoughts in the field, I have written about it on several occasions. Yet I have come to doubt whether I have even scratched the surface.

We have had many glimpses from many angles, including repeated market turmoil, global recession, and geo-political upheaval.  Recent contributions to awareness of the greater economic tapestry have come from Joseph Stiglitz, a Nobel laureate in economics (see here) and two of South Africa’s most experienced and thought leading economists. Writing in Moneyweb, Mike Schüssler speaks of the “depressive commodity super cycle” and Cees Bruggemans in his Economic Insights, puts emphasis on a country perspective. I urge you to read them. They give much depth to this subject, but cannot be fully covered here.

I would add or at least emphasise four in the mix: the explosion of global monetised debt; the declining role of labour in value creation, technology and climate change. (For views from top world economists see this link).

South Africa is clearly at a fork in its economic road – one that we might miss as we face off against each other. Our obsession with domestic economic transformation, as valid as it may be, pales into insignificance compared with the urgent need for transforming our economy to fit into the vastly changing global context. (See Schüssler comment here.) In short we have to change from a commodity producing to a more diverse international trading nation. At the same time we must boost import replacement, especially through SME’s. It is not a new theme, but it has taken on a completely new and dire urgency.

The way to get there has also been well documented, including repairing the many potholes in the road such as the need for streamlined, prudent, incorruptible, business-friendly and efficient government and SOE’s; education and training, and addressing the weaknesses and building on the strengths of those factors routinely listed in the WEF’s Global competitiveness report. To these I would add the absolute need for inclusion and participation of labour. The ultimate point is a fresh re-engagement on all of the issues that divide us; reinventing ourselves to find a common cause in meeting the global challenge and building on a well and tested formula of national success based on an external focus and people development.

Any trader knows that there are two things that earn market share and create competitiveness: quality and price. We have been given some window of price opportunity in a cheaper Rand. Quality demands more: innovation, consistency, reliability, concerned service, and a genuine desire to make a difference to others. Already I can hear the defensible howls of derision from many. To be sure, this is not a quick and easy path – perhaps even impossible in these times of shrinking markets. But the journey itself will be a magnificent and noble detraction from the pet peeves we have become so addicted to.

Our so-called “A-Team” at the WEF at Davos will have enjoyed a fruitlessly opulent time if they do not return with this one overriding conviction:

The greatest force of all in economics is something which economic laws cannot explain; which cannot be captured by economists’ spreadsheets; by any economic theory or analytical research. It is attitude. It is a lot more than simply having confidence. You cannot build confidence on old paradigms. Having national pride projects as suggested in Moneyweb here is one way, but it may need an overall inspiring cause.

Attitude gives wings to the Phoenix: as it did for countries like post war Germany and Japan, and beleaguered nations such as Korea, Taiwan, Singapore and others. We have seen some of this spirit galvanise around the devastating drought gripping the country. I saw it in Port Elizabeth nearly 50 years ago.

I have lived long enough to be acutely aware of the things that divide us. But we simply have to develop a national attitude that will forge a common cause in meeting the enormous challenge that we face. Or we can continue to obsess about “things that must fall”.

Until everything does.

Tuesday, January 19, 2016

Recapturing our finest hour

2015 was certainly something of a tumultuous year on many fronts, presenting a new year with a beleaguered economy; a beleaguered currency; a beleaguered President; a fiscus on a tightrope and crucial forthcoming local elections.

But one of equal concern that made the news agenda in the opening week of the year was race relations. 

It is not a tenuous concern. It has already blurred, at times justifiably, at other times irrationally, the major issues facing this country and if it continues, could overwhelm them. It is taking place against the background of the greatest humanitarian crisis since the Second World War – a crisis that can be traced back to those very race and cultural divisions that we so easily flaunt with in the current racial rhetoric. It’s like witnessing a child play with an explosive substance. It has to be stopped; not by covering it up, but by an increased awareness and appreciation of just how dangerous it can be if it is allowed to run away with itself.

Regulatory framework
After more than 20 years, clearly much still has to be done in moving from structured segregation to multi-cultural integration. The invidious inherited structural undertones of inequities, inequalities, lack of opportunities, and training and education deficits have in turn fuelled flashpoints in expectations, entitlement, race and class privilege, and continued discrimination.

There is a simple choice in addressing inequity: intense, massive and forced redistribution; or accelerated economic growth to draw in and advance the previously disadvantaged. The first could be disastrously costly; the second demands patience, tolerance and a concerted effort at other forms of reconciliation. The first could in any case severely impede the second, without which the first becomes unaffordable and suicidal – a classic vicious cycle.

We have tried some form of combination of the two and have at best had mixed results. This could be largely attributed to external factors, but we cannot fully dismiss the cost of emphasis on the first option in impeding the second. At the very least, those who speak lightly of “economic transformation” show scant appreciation of the highly complex and multi-faceted forces at work in ensuring sustainable economic growth; especially in this world of fickle capital and quaking shifts in conventional structures of wealth creation.

On top of that there is no guarantee that the first option of massive redistribution will make much difference to social cohesion itself. We have not only made race synonymous with inequity, but for the most part exclusively the ongoing cause of it. Yet polarising inequities exist increasingly across the world, both internationally and domestically.

Making those inequities colourless, will give some respite in race relations but could exacerbate them in a class form and with all very much poorer. Relying mostly on regulation to change behaviour is seldom effective. But at the very least, the regulatory framework needs reviewing to create new targets that shift away from exclusively measuring wealth inequities and to include social cohesion goals.

American writer and Nobel laureate, Toni Morrison once said: “The very serious function of racism is distraction. It keeps you from doing your work. It keeps you explaining, over and over again, your reason for being.”

As much as racism distracts the victim, the victim can also use it as a distraction. This is particularly true of leaders who time after time use the “race card” to deflect accountability. (See latest example here.) It has become fashionable to silence critics by implying some racial bias in the censure. Once that sticks, it mutes further criticism not only of the source but the subject as well. In addition, it fuels anger and polarisation.

We cannot underplay the lingering and justifiable anger and resentment that many in South Africa still have about the past. But if we can learn one thing from history, it is that civil strife and sectarian violence mostly have their roots in inherited anger and resentment; emotions that are deliberately or even unwittingly passed on from one generation to the next, sometimes spanning centuries.

Racism is about individual behaviour. As such it is the one thing, more than any other, which we can control as people and help shape our national destiny. We all have our prejudices. It is how we act on them that defines who we are. Prejudices are easy to justify, entrench and confirm. But they are also barriers to knowledge and self-actualisation.

But let’s acknowledge an important falsehood first: the iniquitous generalisations that ignore the very many expressions and acts of goodwill between people of all colours, the many close bonds people have across colour lines and the majority that harbour no ill-will towards others. (See example here).

That said, I have for a long time felt that in the interest of so-called “robust debate” and freedom of expression, we more often than not are simply discourteous and impolite. We see it everywhere: in comments on websites, interviewers and debates on television and of course the crescendo of garbage on social media. It seldom contributes to increasing knowledge and understanding.

Clearly, as a nation, we have to learn to deal differently with social media. It has the ability to catapult the petty and irrelevant into the mainstream; into national consciousness to give it a status far beyond that which could be compared to the cacophony of inanities and profanities one hears in the local pub.

But here’s the paradox: notwithstanding the deep hurt and sensitivities that exist, the most effective way of defusing racism and racial slurs is by not taking the rhetoric itself too seriously at a personal level.  Ridicule is always an effective counter to any insult. It means simply: don’t hurt, and don’t be hurt. The latter is as much in our control as the former.

Of all of the most majestic goals we can have as a nation, there is none greater than achieving a state of peaceful multi-culturism. It overshadows in significance any other and can be an example that could take all of humanity a giant leap forward, particularly in these very turbulent times and what’s happening elsewhere.

We held that position for a brief period after 1994. We can recapture it.