Local is lekker, but hands off our Beemers and Cartiers!
Hats off to Treasury for protecting SA-produced cement, but it would help if such measures extended to luxury goods
As politicians trade on racial divisions ahead of the local elections, confusion about how many nations we are in SA is widespread and growing, typified by the announcement by Zulu prime minister Chief Mangosuthu Buthelezi this week that he is “known as a Zulu Indian”. Who’d have guessed?
In this pre-election scramble, where you can’t reliably distinguish your chiefs from your Indians, what better way to unite the nation than by a quick, sharp burst of nationalist trade protectionism? So, from next month, no government entity can use imported cement for the building of any official structure.
It swells one’s chest with pride to witness an agency of state — step forward our incorruptible Treasury — doing that most unusual thing for government, which is taking an actual decision that seems to make good sense and pushing ahead with it. It’s a move that’s potentially more important than just being about what cement our next half-completed public water project will be built with. Instead, it’s about reviving the South African industrial project, which has all but been destroyed by greedy bosses and rigid unions, the whole catastrophe cordoned off with red tape and strewn with administrative and legal landmines. Divorcing one’s wife is simpler than dismissing an employee.
The belated move to put the interests of local industry first may not be enough to save our shrinking industrial base, but it could be a start, if managed correctly and if public interest is prioritised over special interests. But what of the factors that have killed the factory in SA? While domestic issues were a contribution, international factors also played a role, prime among these being the rise of China as a manufacturing power. Regrettably, and because we convince ourselves that whatever the terms of our relationship with China it’s still better than Western-style colonialism, SA has followed a traditional and hollow style of foreign relations, mostly of the fawning variety.
It’s well-known this tendency has led to a growing reliance on cheap Eastern and other exports at the cost of local production, which means at least you can buy a T-shirt for R20, rather than the R100 you’d pay if a local Cosatu-affiliated union’s workers had produced it. Which is just as well, because jobs have disappeared and you can’t afford much more than R20 for a T-shirt anyway.
Not that our rich people, and those of our new elite swimming in the pool of cash from government tenders, will bother with a locally produced item. Increasing proportions of local currency have to be surrendered at exorbitant exchange rates for the dollars needed to buy the imported toys that somehow validate their success. Someone has to pay for all this, and it’s seldom the middle classes made soft by easy credit and conspicuous consumption.
Behind the ruinous terms of trade and the destruction of local industry, “normal" diplomatic relations are conducted as if between medieval kingdoms, replete with bowing and scraping. It’s unconscionable for anyone to even suggest it is the terms of trade, and not the exchange of diplomatic cigars, that measure the quality of friendship. You’d say we’re the Austro-Hungarian empire judging by the way we conduct our foreign relations. We’re desperate to please and curtsy to the right people.
Our diplomatic service has become a pasture for retreaded ANC ministers and officials, sometimes a reward, sometimes a way to get them away from trouble at home, and often to escape accountability. With diplomacy and other public endeavours we’re great at the ceremony and going through the motions; the substance we care less about.
So we’re seen as a soft touch, ever ready to throw our weight behind the latest faddish international cause, rather than looking out for opportunities for local industry. A rent-seeking mentality often prioritises the interests of international companies over local ones, to benefit connected middlemen.
Now the government is pushing for localisation, to mop up some of our unemployment and to take advantage of the crisis in supply chains around the world. But don’t expect items such as BMWs, Mercs, imported champagne and cigars, and Louis Vuitton handbags to feature. These toys for the rich will likely be spared any effort to come up with a local alternative.
What will be listed for localisation treatment are many of the items the poor can afford now, but thanks only to China. Clothing and shoes are ideal targets, so the question is whether the working class and the poor will once again be forced to pay the price for import substitution? Probably yes. The unions, meanwhile, must be looking forward to a new era of sheltered employment, where initiatives directed at cutting production costs will be rejected as unpatriotic. The result will be higher prices, inflation and diminishing international competitiveness.
The government can show it’s serious about localisation and reap maximum gain for the country by putting a hefty surcharge on imported luxuries and energetically pursuing sensible and modest localisation where it is possible.
What shouldn’t happen is that localisation covers up for an inability to compete internationally because of flawed industrial and labour policies. This was the pattern in the apartheid era, when local production was necessary in response to sanctions. Remember the Ranger, which was sold and marketed as “SA’s own car”? A hideous contraption, it came with a GM engine and the chassis of a police Casspir. The happy family who bought the thing were meant to brim with pride as they clunked past in their patriotic transport. The shame!
It’s almost impossible to envisage our cabinet ministers, who are routinely driven at speeds that would subject a normal person to the effects of unhealthy and unnatural g-forces, being happy to be carted to their next ribbon-cutting in a locally produced jalopy. Not even knowing that the new building they’re opening is constructed only with local cement will compensate for the absence of the imported luxury wheels that have become the symbol of our success, and the symbol too of our neglect of our once-thriving industrial sector.
Sunday Times Daily