You Had 20 Years To Focus Economy On Local Industry

2015-09-01 12:43

What I’ve unfortunately come to realize about economists is… they probably don’t understand economics. Either that or they have a difficulty in transmitting their understanding of Economics to business, government and society.

Each time an economic tsunami hits, the economists are suddenly up in legions, providing their now pointless deductions to every news channel or publication. But why were they all not so much vocal before the catastrophe befell us? Why haven’t they been sounding precautionary alarms all through, way before disaster befell?

Export Dependent Economy

The United States is one of the most celebrated nations on earth when it comes to Economics. But all this did not stop them from succumbing to a devastating recession back in 2008, which in some twisted way of contemporary economics, resulted in the whole world suffering the effect.

People in South Africa lost jobs as a result of reckless ‘fiscal’ decisions on the other side of the planet. I did not understand economics then, I do not understand economics now, but I guess I’m not alone (winks at Financial Analysts). I find it figuratively tragic that even with all the analytical skills economists have at their disposal, we still can’t avoid these frequent market upheavals.

China has in recent times been hailed as South Africa’s biggest trade partner. This means in our privatized economy, some of our biggest companies get revenue from this relationship with China. Should China suddenly experience financial glitches and withdraw their business with South Africa, people would lose jobs locally.

This is the basic problem with the South African economy, that we have dedicated a significant percentage of our economy on exports. Another problem is the foreign ideology of capitalist privatization, wherein a company reserves the right to retrench workers when business takes a slump. This lays the precedent clear that a private business is exactly that – private. This makes the workers mere beggars at the mercy of economic uncertainties and decisions of profit minded shareholders.

Pre Colonial Commerce

Privatisation came to South Africa as a result of unprincipled Western Colonialism, championed by a sect of bigoted Scandinavians under the banners of several European nations. The Dutch East Indian Company was reportedly the biggest multinational in the world when Jan Van Riebeeck was appointed by The Hague to annex the southern tip of South Africa.

Contrary to colonial myths told to justify barbaric colonialism, African kingdoms were well versed in global trade, and as a result of some valuable goods they produced or mined, their nations were major landmarks in global trade routes. From the richest king in modern history, Mansa Masa of Mali, to the ardent gold trading Mono-Mutapa kings of Zimbabwe, African kingdoms were fierce business entities before colonialism.

The Portuguese were the first Europeans to infiltrate Southern Africa with motives rather ulterior to trade.  Their primal aim was to intercept the Zimbabwean empire’s lucrative trade with India. Soon the Portuguese showed their true motives and engaged Mono-Mutapa Matope, but succumbed to local disease, retreating to their coastal camps. Here they eliminated the local traders and replaced them with their own agents, but were still subjects of Mono-Mutapa, who taxed them greatly for their imports, until about 1630.

What I find intriguing about African economics before colonialism is, business was conducted by the State, not private individuals. If a nation was supposedly mining a mineral and supplying a foreign other, and the latter ceased ordering somehow, the people employed by the state or monarchy would not subsequently lose their jobs and earnings, as it happens in the western capitalist private sector. They would either keep mining for local supply and storage or be diverted to another industry or activity.

This is not to coat the pre-colonial African system of commerce with a golden layer of utopia, but to highlight the irrationality of the western ‘profit minded’ contrast. The ANC’s Freedom Charter is one policy document which sought to deal with the problem of greedy profit oriented privatization, which Europeans were excelling in at the expense of the dispossessed black majority.

It was Nelson Mandela himself whom at the famous Treason Trial of 1964 declared his ‘admiration of the structure and organisation of early African societies in this country’.  He further added that “the land, then the main means of production, belonged to the tribe. There were no rich or poor and there was no exploitation.”

Democracy and Free Trade

But in coming into power in 1994, the ANC inexplicably adopted the same western driven neo-liberal system of economics and implied the Freedom Charter’s Nationalist ideals were outdated. The new country then promoted globalist principles and multi-nationals became the new government. In contrast with pre-colonial African kingdoms, the ANC government resembled a destitute tax collector in an intimidating realm of larger than life unruly monopolies.

Not only was the profit driven ideal of Capitalism unjust or unequal socially, but it was also unsustainable in terms of nature conservation. This is to suggest we no longer live in the depraved Victorian age of obliviousness and unrestricted gluttony. No more could we simply conceive an entrepreneurial vision and then rush to fulfill it without firstly considering environmental and sustainability issues.

As a result of this highly erroneous post-apartheid approach to economics, the South African economy grew as foreign multinationals piled in, while local corporations themselves spread out to guzzle overseas profits. White and Black elites therefore saw no need to focus the economy on local industry because their world was practically a cogent network of interrelated business. What you didn’t make you could easily import in the haven of Free Trade, as globalist capitalism is called lately.

Local Industry

South Africa is a nation populated with qualifications wielding economic experts and veterans, but no one saw the need to kick-start a local industry initiative at the dawn of our democracy. We have one of the world’s highest unemployment rates, yet we produce some of the most valuable or essential minerals on the planet, which doesn’t add up.

One detestable thing about a capitalist economy is the private sector is not obliged to create employment. Either our post-colonial government should as such nationalize the economy and prioritize local industry, or should regulate and exert greater control on the private sector. There’s no way that a self-respecting government can leave the responsibility of job creation and employment to a capitalist private sector. A country that just keeps begging for foreign investments is worse than distressing really.

Much of the irregularities in global economics wouldn’t really affect us as a country if we had a self-sufficient economy focused on local industry. Why do we have haughty Europeans who claim to have brought civilization to South Africa when we still have to import everything from Europe and Asia? Why are we not supplying local manufacturers with our own raw materials, but rather exporting them only to import them back as costly goods?

How long is South Africa going to prayerfully lean on the unpredictable and unreliable shoulder of global economics? South Africa should by now be having strong and independent industries in the pivotal fields of manufacturing and agriculture. Consolidated with a more socialist business model, we would not be going into sudden panic each time drastic changes took place in the global stock market.

(Check Out My Blog on Twitter: @JustSmartRage)

News24 Voices Terms & Conditions.

Globalism, Economics, South African Economy, Recession, Industrialisation, Colonialism, Capitalism, Free Trade, Privatisation, Socialism, ANC, South African Democracy, China, USA, Africa

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