Clem Sunter

The silent death of the private sector

2013-02-22 09:05

Clem Sunter

Communists in South Africa must be popping the corks of their champagne bottles as they witness the dream of a state-run economy coming true. Socialists must be wearing a wry smile as, despite their belief in a mixed economy, they do have reservations about the profit motive. Why all this celebration? Because the big picture suggests that, with some illustrious exceptions, the decline and fall of the private sector is happening before our eyes.

The flags are going up everywhere:

- South Africa is no longer seen as the premier investment destination in Africa. The World Bank's list of fastest growing economies over the next five years has seven African countries in the top ten. They are embracing free enterprise while we continue to be dogged by policy uncertainty and increasing bureaucracy;

- Graphs shown by economists at seminars indicate the destruction of jobs in the private sector over the last five years offset by growing public sector employment and government grants. In January, the overall drop of 50 000 jobs countrywide hardly dented the stock market or merited any press comment. In America, the Dow would have fallen 5% on the news and the President would have been furious.

- The hikes in electricity tariffs - past and future -  are completely undermining our competitiveness as a nation. Meanwhile, the country's flagship project -  Medupi which is also the largest project in the Southern Hemisphere - has had no construction activity for over a month. Any hopes of the private sector having access to greater electricity supplies in the near future are currently being dashed;

- New small business formation has stalled as a result of lack of support for entrepreneurs and over-regulation. At the same time, many small businesses are going bankrupt on account of an inconsistent payment culture in government and big business. For many in the union movement entrepreneurs have no right to exist as entrepreneurship does not amount to decent work. As members of the tripartite alliance, they can adversely influence the ruling party's attitude to small business;

- Cadre deployment and corruption have shut down many opportunities for the real stars in the private sector to be awarded state contracts. Equally, the cost of maintaining and building new infrastructure has gone through the roof, further undermining the cost-efficiency of the private sector;

- Hard times in the global economy combined with the growing anarchy in the workforce (where even established unions are no longer listened to by employees) have seriously squeezed many of our resource businesses which are a prime element of our economy. Even the largest companies in South Africa have limited cash reserves and borrowing facilities. If exhausted, they go bust;

- Unrestricted imports are causing havoc in our textile and food industries, lowering production capacity and making the nation more reliant on the private sectors of other countries. Farmers are dreading land reform and selling up.

I could go on, but I think I have given enough examples to show that something is rotten in the state of South Africa. We need to reverse the downward slide immediately. The only way we are going to do that is by having an Economic Codesa with measurable outcomes. Please, Cyril, step up to the plate. If you want to triple the size of the economy by 2030 and reduce unemployment to 6% - which is the objective of your and Trevor's plan - you have to have a thriving private sector. But you know that already.

NEXT ON NEWS24X

The spectre of war

2014-04-17 12:11

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
53 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 
Traffic
Lottery
 
  • Thursday Sir Lowry's Pass - 05:35 AM
    Road name: Old Sir Lowrys Pass Road
    TRAFFIC LIGHTS not working at Bezweni Road
  • Thursday Cape Town - 05:35 AM
    Road name: Buitengracht Street
    TRAFFIC LIGHTS not working at Waterkant Street
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

BlackBerry Curve 9380

The first BlackBerry Curve smartphone with a touch screen Stay connected...

From R1799.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

You may find yourself putting in that extra effort on looking good and making an impression. ...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.