Politics

Africa Within a World in Transition

Posted on Nov 6, 2013 in Development, Featured, Infrastructure, Politics

Africa Within a World in Transition

The world is indeed in the throes of one of the most profound transitions in history. Not only do technological and economic changes have world-embracing effects, but also the prevailing socio-political dynamics has no historical precedence. This is not to say that in the past the world has not had periods of deep and game-changing transitions. For example the advent of industrialization in the 17th and 18th century culminated in the dawn of a new world order in which the West emerged as a dominant economic, military and colonial power. The ancient civilizations of India, Africa, China, Ottomans and Persians were subjugated for a few centuries to come. Yet in comparison with the contemporary transformative forces, the industrial revolution had limited reach and its impact was slow.   The many forces of contemporary transformation in human and social life may be broadly divided into two categories. One group tends to integrate socio-political, economic, and cultural life across regions and continents. Such integrative forces tend to narrow the gaps across communities and nations, build bridges within and across cultures, and create rising levels of social capital even in the midst of very diverse and segmented groupings.  The emergence of a global and fully integrated financial market is a case in point. Within the socio-political arena, the rise and growth of “borderless associations” such as ‘doctors without borders’, or ‘environmental activists without borders’ (Green Peace), and the like are all but part of the same dynamics.   The other category of forces is inherently disintegrative. Whether in socio-political arena, or within the religious, cultural or economic sphere, such forces are inherently disruptive and conducive to the spread of mistrust within human communities. More often than not, such forces are driven by historic and failed ideologies of narrow self-protection and deep-rooted fear of “otherness”- I call this “otherphobia”.   At present, the integrative and disintegrative forces are at play in every land simultaneously. Interestingly, modern communication technologies and social media platforms have facilitated the spread of both these forces and processes. Access to the worldwide web in real time across the globe, the international availability of technology nearly in all sectors, and the rising awareness of what is possible, viable and desirable, have helped create a variety of new communities- mostly virtual. Such virtual and deeply connected communities are a real threat to the establishments across the world. Globally, financial, economic, cultural, religious, social and political establishments are vulnerable to attacks by these virtual communities.   Fairness and transparency, accountability and value-consistency appear to be the watchwords of the majority of these emerging virtual movements worldwide.  Increasingly, to them the national boundaries and the conventional sovereignty considerations are of little importance.   In this milieu, Africa is facing a multi-layered challenge. The continent’s economic growth has taken roots for the first time, and all indications are that industrial diversification could lead to sustainable growth. Yet on many other fronts the continent is struggling to establish institutions that are the effective conduits for channeling growth into social development and human welfare. Far too often, the post-colonial political establishments clash with the emerging social quest for accountability and transparency. A few exceptions aside, political institutions on the continent are largely extractive by nature. This means political leaders regard the machinery of the state as a means of self-enrichment and control. This, of course, they do in the name of sovereignty and political leadership. Legal and judicial institutions are equally and far too commonly bureaucratic, slow, and at time politically compromised. Economic and financial establishments are likewise typically dismissive of social and environmental care. Often...

Read More

Marikana Massacre: A Lesson for Africa

Posted on Nov 6, 2013 in Ethics, Politics

Marikana Massacre: A Lesson for Africa

A year after the tragic Marikana Massacre, where over 46 people were killed, the soul of South Africa remains haunted. Last year September, in this column, I dealt with some of the contributing factors that culminated in this tragedy. As South Africa struggles to come to terms with this appalling incidence and its multifarious ramifications, I believe the rest of the continent has much to learn from it too.   The world over, the history has shown that social development assumes meaning only when the public policy consciously and actively promotes the wellbeing of the working classes and the poor within the society. Focusing on poverty alleviation and the working class welfare does not necessarily mean neglecting the broader interests within the society. In fact taking care of the poorer groups is also partly about securing the sustainability of the well-off classes over time.   This is particularly pertinent for Africa at a time when its growth and development process has gathered real momentum. During such periods of sustained growth, two trends emerge. One is the fact that politicians and policy makers   equate robust GDP growth and its resultant rising per capita income with the betterment of the poor. The second fact is that during periods of sustained growth, the income disparity rises sharply before it moderates over time.  This, the so called “J-Curve” of economic growth dynamics, embodies serious consequences for socio-political stability. Operationally, the shape  of the “J” differs vastly from society to society. The first phase, when income disparities rise, can take many years, even decades, depending on the efficiency and effectiveness of the public sector in the country.   During this period socio-political stability is vulnerable to the rising social discontent. In such times, the relative and visible improvements in the fortunes of the rich together with their conspicuous display of wealth do not sit comfortably with the misery of the struggling classes within the society. In effect, in periods of high growth, the public policy makers and political leaders should be more, not less, worried about the plight of the poor and use the available resources to deal with the underlying structural issues of income maldistribution and poverty trap.   In all likelihood, the Marikana Massacre would not have happened if South Afirca’s political and business leadership remained focused on alleviating the crushing burden of workers’ plight- in this case that of the mine workers. Social and other structural imbalances, inherited from whatever past, do not self-correct. Economic growth generates the required resources and creates the general social receptivity for corrective actions, but sustained and honest political will, underpinned by institutional capability, is needed to effect meaningful improvement in the plight of the poor. Political slogans and ideological sloganeering are dangerous substitutes for a value-based commitment to the removal of the drivers of income disparities.   To the extent that Africa’s current growth momentum is driven by the natural resources sector, South Africa’s experience offers many “how-not-do-lessons”. It is a fact that all over the world, the mining industry is synonymous with the destruction of the environment, land disposition and the use of land potentially useable for agriculture and food production. Such dichotomies have to be managed carefully and responsibly via sound and concurrent environmental rehabilitation management practices.   Globally, the extractive industries have come under the spotlight. As is well known, the G8 leaders are focusing on this sector, not only due to the issues of tax evasion, but also because of the broader factors that have turned the blessings of the natural resources to what is now referred to as “the resource...

Read More

Modern Societies and Ethical Values

Posted on Nov 6, 2013 in Ethics, Featured, Politics

Modern Societies and Ethical Values

Nowadays, the world over, a tangible and troubling rift has emerged between the prevailing socio-economic ‘formal (professed)’ as opposed to ‘informal (practised)’ ethics. For example, in the business sector business executives and corporations formally subscribe to the ‘codes of good corporate governance’. Their annual ‘glossy’ reports are decorated with “impressive evidences” of their socially responsible citizenship. Yet operationally they do not hesitate to collude and/or abuse their market powers. The current “horse meat saga” in Europe and its counterpart in South Africa are cases in point. The conduct of global bank executives in Europe and North America since 2008 has left little doubt about their lack of ethical values. Ironically, their corporations, and hence their shareholders, have been convicted to pay billions of US dollars in penalties. Evidences of price fixing amongst pharmaceutical companies, construction companies, cement manufacturers, bread producers and steel manufacturers have been high profile cases over the past few years in South Africa. Sasol, South Africa’s most celebrated petrochemical corporation, has been heavily fined, both locally and internationally in the EU, for its extensive anti-competitive practices. The country’s banking sector is also accused of malpractices and a report in this regard is yet to be made public by the Competition Commission. The banking sector is alleged to be exerting every pressure to halt its publication. The cellular phone companies are likewise accused of collusion to fleece the consumers in South Africa. There are also allegations against tyre manufacturers in the country, and so on….. South Africa is by no means an exception! The gap between the formal and informal ethics within the government sector is even more pervasive and pronounced. Frequently, government ministers and departmental executives espouse ‘global best practices’, and yet operationally in their organizational and managerial behaviour there is little evidence of the values, standards, or practices that conform to their formal statements. Whilst the political leaders often express commitment to serving the people, the experience of the citizens speaks of a contrary and divergent conduct.  Duality of the values is equally prevalent in labour unions, the media sector and other social structures and organisations. In the recent past there has emerged much publicized and high profile global cases of value duality within the institutionalized religious establishments too. Sporting personalities and organizations likewise have been proved to be polluted by value inconsistencies. Pervasive duality of values within the society leads to a vast array of social ills. The most visible of these is the spread of corruption in both the private and the public sectors. Disturbingly, the prevalence of corruption is no longer a phenomenon confined to any particular continent, region, country, culture, religion or developmental status of the society. There are convincing and growing evidence that the facts as well as the allegations of corruption in the society have gradually tarnished the internal and external perceptions of the state operations as well as the political authority of the governments. As a result, social trust in governments has been considerably undermined.  Whilst the economy and the society at large suffer the consequences of widespread corruption, the poor within the society bear the brunt of its impact. After all, the poor are far more dependent on the performance of the public sector. The growing gap between the rich and the poor over the past decade is in part due to the growing spread of corruption, and more broadly the duality of values, across all sectors and spheres of the economy. The duality of values has been accentuated by the processes of socio-political globalization. In general, it is much easier to create convergence of values in...

Read More

Africa’s Triple Challenges

Posted on Nov 6, 2013 in Development, Economy, Infrastructure, Politics

Africa’s Triple Challenges

Nowadays Africa is the darling of the global investment community. Report after report highlights the impressive actual growth and the promising prospects for the continent’s economic performance over the medium to long term. The so-called “dark continent” has transmuted into the “bright continent”. And, that is most welcome. However, for these sentiments and opportunities to be converted to sustainable socio-economic developmental momentum a number of key issues need clear recognition and effective solutions. Three of them loom large in this context.   First and foremost, it is critical to recognize that there is a difference between the requirements of the short and medium term economic performance and those of the long term sustainable development. It is a fact that most African economies are growing from a low base at high annual rates. This is because at the early stages of growth, opportunities for investment are plenty and capital flows are insensitive to the critical role of economies of scale. However, when these short term- the so-called “low hanging fruits”- are exhausted, capital flows increasingly respond to market size, economies of scale in production, and the comparative advantages arising from well-designed and integrated infrastructural logistics- something that more often than not requires a great deal of transnational coordination and operation. In this regard Africa is way behind. Neither its political nor its institutional structures have moved far beyond the colonial mindset! The historic fact of Africa is that the colonial past left the continent with too many sub-optimal independent territories, most of whom lack the absolute or relative economies of scale.  On top of it blind nationalism and even raw tribalism are still excessively prevalent on the continent. Yet, many countries are way too small a market to generate internal sustainable growth momentum for the medium to long term. In a world where increasingly global competitiveness matters, this is a real challenge that Africa has to overcome- and need to do so urgently. Even if political boundaries are kept, agreements have to be reached to facilitate investment and industrialization policies that are based on solid regional integration platforms.   Second, and related to the above, is the need for industrialization across a set of industries where Africa, and sub-regions of the continent, have sustainable or dynamic comparative advantages. Once again, for such a strategy to be successful, economies of scale are vital. Strategically, the global factors are in favour of Africa’s industrialization. The continent’s resource base in some key sectors is rich, global capital markets are awash with “cheap capital”, and the required technologies are easily accessible. Examples in this regard include mining equipment industries, the petrochemical complex, food and agriculture industries, and clean energy generation. This favourable structural configuration is only the necessary condition. The sufficient condition, however, is to put in place the required long term framework that creates ample and evident economies of scale for investments in transnational logistics, market access, human resource development and capital market institutions that guarantee the medium to long term developmental sustainability. Importantly, Africa cannot replicate the industrialization templates of Europe, US, Japan or South-East Asia. The dynamics and requirements of industrialization differ at different times for different regions. In this context, the national policies within Africa are unlikely to succeed unless and until they are integrated into the continental or sub-continental industrialization strategies. The third, and most important, challenge is related to human resources development, with focus on the youths. It is a fact that Africa has one of the youngest demographic structures at present. Global projections indicate that for the next four to five decades, African demographics will be dominated...

Read More

Normalizing Economy Facing Geopolitical Risks

Posted on Nov 6, 2013 in Economy, Featured, Infrastructure, Politics

Normalizing Economy Facing Geopolitical Risks

Five years after the ‘great recession’ of 2008, the global economy is showing the early signs of ‘back to normality’. Chances are that 2013 will mark the tipping point. Normalization in common economic jargon means a global economy which is growing at or around its long term growth path and is subject to cyclical variations together with regional divergences in economic performance. Clearly, the global financial and banking crisis is by and large over- thanks to the gigantic bail out by many governments and central bankers. The housing market is also gradually returning to normality. Even the EU political debacles surrounding the euro and its associated political economy issues appear to be managed down. Predictions of the EU split have proven no more than false alarms or hasty predictions by those who have clearly under-estimated the collective intelligence and commitment of the European leaders to stay the evolutionary course of their political integration.  Whilst the banks are back in a fairly sound financial status, the same could not be said about their respective governments. In many countries, financial interventions by governments have left the national fiscus in fairly vulnerable state- that is if not already bankrupt. Countries like Ireland, Spain and Portugal are in dire fiscal conditions, whilst UK, USA and France teeter on the verge of fiscal vulnerability.   All said and done, it is by now clear that since August 2008 the unprecedented measures taken by national governments and the central bankers, mostly in the OECD member countries, have averted a total global economic and financial collapse. This has been achieved, to a large measure, at the expense of the poorer groups within the society. Because when the government finances are short, it is the poor who ultimately bear the brunt of it, especially in the short term.  With job shedding in the public sectors and drastic cut back in public subsidies and welfare budgets, the societies experience all kinds of social tensions. Political leadership in such a milieu faces a major credibility deficit. Lack of confidence in political and social leadership in turn undermines the societal cohesion, destroying much hard-earned social capital.   On the economic front, one of the direct effects of the monetary policy stance has been a sustained low interest rate policy worldwide and a global capital market operating in a liquidity trap.  Such prolonged configuration has many political economy side effects, two of which merit special attention. One is the rise in speculative activities diverting resources from real economic enterprises. Consequently, constructive and job creating ventures are substituted by financial transactions that offer high short term return on capital.  Predictably then even when economic growth is registered, the level of employment creation is either stagnant or at a much lower scale. Whilst this is a worldwide phenomenon, for the emerging economies it entails profound socio-political risks. Some of the emerging economies may even find the consequences too problematic- politically speaking. In such conditions, countries such as Argentina, Russia, South Africa, India and Nigeria are in danger of degenerating from an emerging economy status to a “sub-merging” state, however gradual it might be. The second, and as concerning, effect is the rapid rise of income inequality at both national and global levels. The combined effects of these development lead to socio-political instability.   Globally, regional economic performances are bound to differ considerably. As economic normalization takes root, it is more so that regions with better and superior fundamentals will begin to benefit more and perform at a higher sustainable growth levels. Paying attention to the basics of adequate infrastructure, governance institutional integrity, policy...

Read More

Marikana Massacre: Causes and Consequences

Posted on Nov 6, 2013 in Ethics, Politics

Marikana Massacre: Causes and Consequences

On the 16th of August 2012, when President Zuma left for the SADC meeting of Heads of States in Mozambique little did he know that this day would mark the darkest day of his presidency. A few hours after his departure from South Africa his government’s policy special unit mowed down 34 workers in cold blood and injured another 78. This was a tragic climax to six days of a wildcat strike by Lonmin’s rock-drillers who had demanded a minimum monthly wage of R12500 (approximately US$1510), leading to a total death of 42, inclusive of 2 policemen. In the annals of SA history, this will go down as a massacre that new South Africa never imagined possible under its democratic constitution. Dubbed as the Marikana massacre, the appalling incidence is the single most lethal use of force by South African security forces against civilians since 1960’s Sharpville massacre of the apartheid era.   The horrific events at Marikana have some multifaceted and deep political roots. Some aspects of it began over a decade ago within the National Union of Mineworkers (NUM), and eventually culminated in the formation of the new union called Associated Mineworkers and Construction Union (AMCU). The top leadership of AMCU is hell bent on diluting NUM to insignificance! This was an intra-union but fierce fight with political undertones. However, in the current landscape where within the ANC alliance there are serious splits, and various groupings are contriving and conspiring to remove those in power, this has become a politically convenient platform for those opposed to NUM, and by extension opposed to President Zuma. It is noteworthy that NUM and its president are staunch supporters of President Zuma.  AMCU has been hard at work to raise the stakes at every opportunity over the past six months. AMCU activities have been mostly in the provinces of Limpopo and Mpumalanga, more recently spreading to the NW Province and the Northern Cape. Meanwhile, the anti-Zuma camp within the ANC alliance has been hard at work to strengthen AMCU.   With this in the background, Lonmin mismanaged its labour relations processes in the run up to August 10th, giving bonuses and allowances without proper communication, and totally oblivious to the underlying tensions between NUM and AMCU.  This gave AMCU a “golden opportunity” to agitate and undermine NUM, Lonmin management, and set the stage for a full-on confrontation. Despite evident signs, Lonmin remained insensitive to the bigger picture, resting assured that having Cyril Ramaphosa as their key high profile shareholder and director will save them! This was a fatal error of judgement. Expectedly, Julius Malema emerged as the champion of the striking workers, challenging the leadership of President Zuma and Cyril Ramophosa- both of whom had been instrumental in expelling him from the ANC Youth League last year. Malema had invested heavily in the previous two years to strengthen AMCU and set himself up as the champion of the working class, especially the mine workers.   Whilst this was going on, the police too made some elementary and fatal errors.  Chasing workers on foot in such a highly charged environment is sheer incompetence and indicative of the lack of basic training in crowd control. .As a result, two policemen were hacked to death in the events prior to August 16th, and then the lines were drawn in the sand within the policy force.   Without a doubt the Marikana tragedy has tarnished the country’s image badly, and has placed South Africa’s international credit rating at serious risk. The splintering within the ANC alliance has come to haunt the party, its integrity and...

Read More