Were we wrong?

2013-07-05 00:00

I FLEW to Cape Town last weekend to emcee the Maserati Charity Yacht Regatta. One of the “perks” was that I would be on one of the racing yachts on Saturday afternoon and would then morph from waterproofs to dinner suit, and flawlessly conduct the evening’s gala dinner. The only possible fly in the ointment was chronic seasickness.

Having lived in land-locked Johannesburg for the past 32 years, I haven’t had much opportunity to hang off the side of a yacht with my derrière dragging in the water. So I was delighted when I arrived at the Royal Cape Yacht Club on Saturday to sunny skies and calm seas. So calm, in fact, that Sea Oyster, the catamaran that was hosting team Maserati and me, had to use engine power to get back to land.

My flight out of Cape Town on Sunday morning coincided with the arrival of an aircraft with the words “United States of America” on the side. Yes, indeed, the U.S. president was landing at a bog-standard airport. Apparently, he couldn’t land, Gupta-style, at one of our key point military air bases because the runways are too short. How’s that for bad planning?

It was a typically understated affair with fleets of bullet-proof limos parked on the tarmac and lots of men in sunglasses with curly bits of wire going into their ears. Four military cargo planes were parked in a row, presumably to fly the whole travelling circus out again when the show was over.

I’m not quite sure why Barack Obama came here, other than to sample the Cape Town winter weather.

The ruling party has made its anti-American views known over the years and cabinet ministers have regularly thumbed their noses at the United Kingdom and the U.S. Quite what is in it for the U.S. or South Africa is uncertain, but I suppose we should feel honoured that an educated black president, with not a hint of scandal attached to his name, is prepared to converse with an uneducated black president mired in controversy. That’s politics for you.

What did occur to me during Obama’s visit was the thought that maybe we have backed the wrong horse with our Brics association. Things are not going quite as well with Brics as many had hoped and, perversely, things are going much better with the U.S. than anyone could have ever imagined. Daniel W. Drezner made some very good points in an article in last week’s Spectator (“The return of America”).

He makes the point that, unlike the UK, the U.S. is now free of bailed-out banks, having sold them at a tidy $25 billion profit. Contrast this with the UK’s lack of success.

As Drezner puts it: “Britain looks like it will be saddled with zombie banks for another decade.”

While U.S. government debt is still breathtakingly high and rising, American households and companies have been reducing their indebtedness. The debt to income ratio of U.S. households has fallen from a pre-crisis 137% to 116%. This is lower than European household indebtedness. The equivalent figure for the UK is 160%.

American manufacturing is also doing well, for the simple reason that U.S. energy costs have plunged.

The Americans have gone ahead enthusiastically with hydraulic fracturing (fracking), with the result that gas prices are a third of those charged in Europe.

It’s already old news that by 2020, the U.S. could topple Saudi Arabia to become the world’s largest oil producer, and some pundits predict that by 2030, the U.S. could become self-sufficient in energy. While other governments dilly dally about fracking because it might upset the environmentalists, the U.S. has taken the view that all that stuff underground is the best way to improve the lives of those overground.

Five years ago, there were plenty of experts writing off the U.S. and saying that the new game in town was the Bric alliance of Brazil, Russia, India and China.

But, as the song says, “it aint necessarily so”.

Brazil’s problems go far deeper than an objection to so much money being spent to stage the World Cup in 2014.

Russia’s energy boom is at an end and China could be heading for its own credit crunch, having created a property bubble.

It’s also unlikely that China will remain a source of cheap labour, as Chinese workers see the prosperity springing up around them and demand higher wages and better working conditions.

As far as South Africa is concerned, we need to be open for trade with anyone.

We are too insignificant to be calling the shots and deciding who to deal with.

Of course, it would help if we could ditch the economic saboteurs within the cabinet. What would be great, though, would be some indication that the current government has an economic plan for the country’s future. But maybe we’ll have to leave that to Kenny Kunene and Julius Malema.

— Politicsweb.

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