TheBigPond - spotlight on what South African business and business people have been up to in Europe. Edited by South African journalist Christo Volschenk from Stuttgart, Germany. Note: This blog has migrated to a new home at www.thebigpond.eu.
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As good as it gets
According to a local newspaper the South African government launched an "aggressive international campaign" to change the perception (apparently) rife in the international investment community that SA is a crime-ridden place where the authorities lost the battle against crime.
The news about the campaign was received by me with mixed feelings, as they say in the classics.
Here's why. The SA government has never acknowledged publicly that crime is at problem-levels. Instead they quote their own crime statistics, which always (almost always....maybe with the exception of the last year, or so, when some types of violent crime rose again) suggest the situation is improving.
Senior officials in government sometimes reacted to complaints that crime was out of hand, by saying something in this direction: Africa is not for sissies. If you can't take the heat, pack your bags...
Unfortunately, the international investment community also took notice of that reaction and (wonder above wonder) decided that SA was not a place for them.
And so the now-infamous statement made by Nelson Mandela so many years ago (I think he said it in parliament in 1997) namely that whites should stop complaining about crime in their neighbourhoods, because "it's nothing worse than blacks have been living with for decades", finally came back to "bite" the SA government.
But that just as an aside.
So, is crime on the out in SA - as government alleges?
As a non-resident I'm not qualified to judge. But, I surf the web (where I read all the news I can get) and I've got a feeling for the mood among Germans. (I live in Germany and thousands of Germans own property in SA).
In my opinion SA took a HUGE knock as an investment and a tourist destination among Germans in the past 18 months - because of crime. Only seldom do I meet a German who isn't aware of the "terrible crime-situation" in SA.
I also have German friends with guest houses in Cape Town who complained this summer season about a drop in tourist numbers from Germany (at least to their guest houses). Furthermore, friends and family in SA always offer the same assessment of the situation, namely that crime is getting worse, not better (as the government alleges).
I think it's fair to say crime is a continuing (if not worsening) problem and that it's at a level where it damages the economy (maybe even the democracy).
Now to the "worrying" aspects of the "aggressive campaign" launched by the SA government abroad....
The government must understand that it would be foolish to launch an international campaign like this one, with a house which is not in order (read: with crime rampant). It would be a classical case of treating the symptoms, while ignoring the causes, would it not?
And a waste of money. Because every crime is published on the internet in its bloody detail - for anyone to read (including those damn investors in Europe and the USA).
So, what is happening here? Could it be that this government really thinks crime is not an issue in SA? That this is as good as it can get...?
That's the only conclusion one can come to, isn't it?
Well, then the campaign won't have the desired effect, but instead re-send the old Mandela message, namely that Africa is not for sissies and that you simply have to be prepared to take a regular portion of blood and guts with your morning cereal.
My guess is foreign investors are not prepared to take it - and will continue to stay away.
Crime in South Africa - a rejoinder
In the article below I "suggested" the SA government's international campaign to convince the investment community that crime is under control and, in fact, on the way out, will fail dismally. Why? Because crime is a HUGE problem in SA and might well be out of control.
Here is an extract from just one newspaper article (there are many more where this came from....) to give an idea of the dimensions this democracy-shaking illness have taken on in that beautiful country.
From The Mercury
May 10 2007 at 04:48AM
By Matthew Savides
Six hijackings, three house break-ins, two vehicle thefts: that was the count of crimes reported in just three hours in Durban's outer west area on Tuesday night.
One of the hijackings left Mercury Editor David Canning with bullet wounds to his arm and thigh when he was accosted by two men outside his Kloof home.
In Pinetown, IFP councillor Esther Bawden was lucky to escape when would-be hijackers fired at her, but missed.
The incidents were indicative of an increase in crime in the region. A community policing body said the incidents were indicative of an increase in crime in the region, while police said they had never seen anything like it.
Inspector Anisa Gariba said the hijackings had occurred in a three-hour timespan and within a small area, which led them to believe that a gang had been in operation....
I rest my case.
Shame on you, motoring journalists!
When a competition for the global car industry called "The International Engine of the Year Award" does not have a sub-category called "Best Green Engine" or "Best New Energy Engine" among its 11 sub-categories, one can (and should) critisize the organisers for their lack of "environment-awareness".
(One could also get meaner and say a competition which makes no effort at all to encourage car engine manufacturers to develop new, greener, cleaner, environment-friendlier engines, is totally out of place in these times of climate change.)
But, the shocking thing about this competition is not that the organisers have not yet heard about CO2, climate change and the need to develop cleaner engines.
More shocking is that the winners are voted by 62 motoring journalists from 30 countries - and that none of these "top journalists" have found anything "missing" or wrong with the competition as it stands now (and has stood for the nine years since it's launch).
That's not all: Without thinking twice, they voted all the world's biggest CO2-producing engines as winners. All those which REALLY damage the environment every time they overtake on the highway.
Do you think a single journalist thought of this? That a vote for one of these big engines is a vote against the environment and against the people who live in Africa?
Nowhere have I read a suggestion that the organisers should, maybe, consider bringing another sub-category in for "green engines", or "Biggest progress made in research for a new engine".
Then there are the engine manufacturers....I guess it's a little too much to expect of them to suggest the abovementioned change to the competition to the organisers. For them to suggest a category "Clean Engine of the Year" would be synonomous with saying the existing engines are "dirty engines". And we don't want that, do we? After all, the aim of the competition is to heap praise on the gasoline engine.
Talking about "gasoline engines"....I was shocked to read that the overall winner of the 2007 competition (a car manufacturer from Munich) still has a "Division Gasoline Engine Development". It must be a mistake. Certainly the car manufacturers are not still investing money in the further development of "dirty engines". Please, let that not be true.
I thought all the gasoline engine developers have long been put into early retirement and packed off to the Maldives or some such island where they can enjoy their old age - and where they can't do mankind any more harm.
But, somehow I think I'm just living in cloud-cuckoo land -Mankind is not ripe yet to tackle the climate-change challenge.
Shame on you, motoring journalists of the world, for doing nothing to change this!
Blowing hot and cold without realising it
To blow hot and cold on long-term economic policy is one of the worse things a politician can do. A German politician has been doing it for a while now. And I have the feeling he doesn't understand he's blowing hot and cold!
To take it from the beginning: Germany's coalition government increased the VAT rate from 16% to 19% (a huge increase) with effect from 1 January this year. The announcement was met with lots of "tandegekners" by the German media and voters.
Nevertheless, it was a wise step, because the state finances were in a sorry state with debt at internationally "unhappy" levels and VAT is a very effective way of collecting extra tax money. And thirdly, because tax experts are in consensus that it's better to tax consumption than to tax work (with a personal income tax, for instance). Finally, at 16% the German rate was still below the EU average rate. So, there was still room for an increase.
As was to be expected, tax money streamed into the state coffers from 1 January 2007 and 4 months later it is calculated that the state could bag up to 180 billion Euro more (yes more) than expected in the next 3 of 4 years (I'm not quite sure whether it's up to 2010 or 2011). Not all of the "extra" income has to do with the VAT rate increase, but a major part, in any case.)
So, lo and behold, Herr Glos, the German minister for the economy and technology, woke up a few weeks ago and suggested a tax cut for individuals. This suggestion was jumped on by the media and a huge debate ensued, between those in favour of a tax cut and those opposed.
I wasn't surprised to hear Herr Glos suggest this tax cut, because he is really a newcomer to the world of economics and what a minister of the economy and technology does in his office every day.
The best way to explain this, would probably be to remind you of Trevor Manuel's first weeks (months) in office back in 1995 (or was it 1996...I'm getting old). Trevor Manuel is the now very experienced and competent finance minister of South Africa. But, he was not always experienced and competent....he learnt on the job. Unbelievably fast, but not before making a few "blunders" in public.
With Herr Glos the story is similar....green on the job, not a clue in the beginning, but learning fast.
But, then Herr Glos had a little "fall-back".....he turned against the views of his colleagues and chancellor Merkel and suggested a tax cut.....4 months after the coalition government increased taxes to get state finances back on an even keel.
Do you get it? A worse example of a politician blowing hot and cold is hard to imagine.
But, now for the really "interesting" observation: Everyone is happily debating the suggestion (media, politicians, economists and voters) without realising how silly the suggestion is....one minute you step on the brake, the next minute you want to put your foot on the gas pedal....
And merely debating silly policy steps like that already has a (destabilising) effect on the economy.
If no-one in the serious press (eg. Financial Times Deutschland) can do it, then someone with oompf like Frau Merkel should get up, put Glos' suggestion in the right context and so bring an end to this silly debate.
Here is what she should say: The coalition government (of which Herr Glos is a member) decided more than a year ago to increase taxes to bring state finances back on an even keel. This policy decision has only been in effect for 4 months now. Policies which change the structure of the economy, are long-term policies. These kind of policies are not fiddled with every second day. And we don't intend changing tack now, or in the next few years.
And behind closed doors she should explain to Herr Glos this thing about blowing hot and cold and ask him to shut up.