The Hope Flower

My new home - www.mzansipreneur.com

2011-11-04T00:05:00.000+02:00

I have been blogging here since 2005. My posts have been sporadic but I have had lots of fun and learnt a little bit about blogging. I will be away from these parts of the internets for some time to come, as I pay more attention to mzansipreneur, an online/offline project focused on entrepreneurship and economic development.

So if you'll looking for me, come and say hello at:

blog - http://www.mzansipreneur.com/

twitter - @trudimakhaya (http://twitter.com/#!/trudimakhaya)

linkedin - http://www.linkedin.com/profile/view?id=4252390&trk=tab_pro

e-mail - mzansipreneur@gmail.com

(I'll let you know if I move to Stellenbosch *wink*)

Starting as a blog, mzansipreneur aims to create a space, away from the hysterical headlines, to have a genuine conversation about innovation, creativity, wealth creation, social enterprise and life in this beautiful and intoxicating country.

We’ve heard all about the tenderpreneurs, those fat cats living off government contracts and easy money. The trade union federation Cosatu talks about the emergence of a predatory class in South Africa, a class made up of unproductive individuals who use their skin colour and political connections to appropriate wealth without contributing to its creation. Reminds one of The Wretched of the Earth, where Fanon makes some startling remarks about the middle class in a newly decolonised country; it tends to follow the Western middle class in its “decadence without ever having emulated it in its first stages of exploration and invention…it is in fact beginning at the end. It is already senile before it has come to know the petulance, the fearlessness or the will to succeed of youth.”

Of course, at the other end of the spectrum, we are warned of big, bad white capital; which resists efforts towards inclusivity and equal opportunity in the economy. Affirmative action, black economic empowerment, redistribution – these policies are said to be failing. The economy, the real economy, remains in white hands. Frustrated black professionals languish in corporate bureaucracies, unable to rise above tokenism to contribute meaningfully to the economy.

These are the narratives that we are fed every day. It seems as though we live in a society that is so absorbed in finger-pointing and sloganeering that it is losing its ability to seek and celebrate achievement and leadership. We are entertained by tales of incompetence and infidelity, of buffoonery, of a nation at a loss of what to do with itself. Meanwhile, unemployment is at heart-breaking rates, communities take to the streets and the economy stagnates.

Young South Africans are fed negative images about who they are and what they can expect of themselves. The media represents success as the "high life" constituting of throwing endless parties, speeding in imported cars and enjoying the charms of beweaved women. Entrepreneurship is being obscured by politically-tinged deal-making, emptiness and superficiality.

At mzansipreneur, we believe that this is not the full story. We believe that South Africa, like the rest of Africa, is on the cusp of a fundamental economic transformation. But first, the citizens’ productive and entrepreneurial capacity needs to be unleashed. Our daring mzansipreneurs deserve to be celebrated and supported as they develop products and services that will respectfully and profitably serve the needs of the continent’s growing consumer base. They also need to be criticised, in a constructive manner, when they do not rise to the moment.

Economic freedom, biting denigration and SANTACO

2011-09-25T19:17:00.001+02:00

This Sunday I have an opinion piece in the City Press, which can be accessed here: http://www.citypress.co.za/Columnists/Lets-support-taxi-industry-in-taking-flight-20110924

Growing up, I often (and sadly) heard the phrase: setlhare sa Mosotho ke lekgowa – the black person’s remedy is a white person. The ailment that needed curing was never specifically and explicitly mentioned. It was assumed to be a general malady of blackness: a lack of capacity, a state of incompetence. It has been said that Tata Mandela was advised by other leaders in southern Africa, before he became president, to keep the whites in the country. Because who will run the trains and the airplanes?

Some audacious people in a black-controlled industry have dared to suggest that they could learn to fly the planes. To people who have become thoroughly convinced of their economic dependence on everyone but their own, this idea seems ridiculous, in spite of the fact that the taxi industry already controls the country’s movements on land. In this article, I argue for a more constructive approach to debating the merits of SANTACO's move into the airline industry, rather than resorting to the "pulling down syndrome."

For the love of God/Joburg Art Fair

2011-09-21T23:30:00.000+02:00

Image: http://www.wired.com/beyond_the_beyond/2011/01/for-the-love-of-god-its-damien-hirst/

Let’s start with the numbers. This sculpture, produced in 2007, is the platinum cast of a real skull, encrusted with 8 601 diamonds. It cost 14 million British pounds to produce and the artist expected 50 million for its sale. This is Damien Hirst’s work of art – titled ‘For the Love of God’.

I came upon it at an exhibition at the Palazzo Vecchio in Florence earlier this year. The Palazzo Vecchio serves as Florence’s town hall. In another era, it was home to one of the most famous families in history – the Medici – those financiers of the Italian Renaissance. It’s hard to think of a more appropriate place to exhibit this spectacular skull than in the home that the Medici lorded over.

Image: Trudi Makhaya

Damien Hirst came into prominence as one the Young British Artists, or the YBAs, patronised by the Saatchi Gallery. This was a moment in British contemporary art when that island seemed to have found its place in the world again; this time as an edgy, cosmopolitan and diverse society. Cool Britannia. The 90’s!

Cool Britannia was, like the Italian Renaissance, funded by commerce, particularly banking. Saatchi was an ad-man, but the real money that can support a very robust secondary art market came from the City of London and other banking capitals.

By the time 'For the Love of God' was made, Damien Hirst was a rare thing – a millionaire artist, represented in New York by billionaire art dealer and gallerist Larry Gagosian. Dirty sexy money you might say.

Where Hirst intersects with the Medici, there has got to be ammunition. A grand palace that symbolises ruthless material accumulation, Florentine decadence and papal corruption; hosting one of the most blinged-up objects on earth…such a display of riches, in that atmosphere, requires a show of force. Being South African, I get that. And so calmly I walked through the Medici corridors, past heavily armed security, to enter the small completely blacked-up room to view this piece of art.

What did I think when I laid my eyes on the skull? I was already struck by the grandeur of the palace, the ceremony of accessing that room, the fabulosity of it all. I just stared and stared at the diamonds – what else to do?

Image: Friendly stranger outside Palazzo Vecchio.

And I couldn’t help but wonder - who are the Medicis of South Africa? I’m talking about those shamelessly making paper, living it up, defining the nation and breaking some rules along the way. Who and where? Fourways, Morningside, Hyde Park, Irene, Stellenbosch, Polokwane, Nelspruit, Graaf Reinet....I'm talking about you!
More relevant to me, entry-level art collector, who is the Damien Hirst of South Africa? I put the latter question to a prominent Jozi gallerist. He laughed.
The Joburg Art Fair is on this weekend. I can’t wait – I have been told to “diversify” my budding collection by the amused gallerist. I’m not certain about the economics of the matter, but I suspect prices might be a little inflated during the art fair. Or not – perhaps on the last day the galleries go all flea-market-at-3pm, cut their losses and reduce prices. There’s a “global” economic crisis out there, you know. I love art so I’m trying to be not too economisty about it, but I can’t pretend I am oblivious to its value as investment.
Happy Joburg Art Fair to those attending!

Links:
http://en.wikipedia.org/wiki/For_the_Love_of_God

http://joburgartfair.co.za/

Passive social investment - MySchool card

2011-09-18T15:38:00.002+02:00

For years, possibly a decade, I have been asked by Woolworths cashiers whether I have a MySchool card. It sounded like a scheme for rich housewives to channel some funds to their childrens' schools and I always replied in the negative without thinking much about it. But a bit of digging on the net has revealed that this is one of the largest (retail) fundraising drives in the country.

Anyone (even wage-slave singletons) can apply for this range of cards and select a range of beneficiaries; these institutions will then receive a fraction of the proceeds. It's not clear what the fraction is, but the programme raises R2.2m per month and it costs nothing for shoppers to join it. And it's not just a Woolies thing, there are various other retailers that support the scheme.

For more information: http://www.myschool.co.za/about-myschool and application form: https://www.myschool.co.za/supporter/apply/. I was pleased to see that St. Barnabas College (my almer mater) and LEAP Maths and Science School (a school producing great matric results for the Alexandra community) are both beneficiaries.

(image sourced from: http://www.myschool.co.za/about-myschool).

Art and About - S’ Phara Phara by Chris Saunders

2011-08-21T21:42:00.001+02:00

Walking through the Parkwood art strip to an opening at Resolution Gallery this past Saturday afternoon, I was struck by the thought that I may be about to witness another case of a white South African who has just discovered black people. You know the type: they have lived in South Africa for most of their lives but don’t seem to have registered anything significant about the black community until well into their adulthood, then some Damascene moment happens and they ditch Melville for Vilakazi Street, write a book/take pictures/make a documentary about their new-found spiritual home, amass a group of poor black friends but keep a healthy distance from black creators in their field; then they win the fellowships and awards, rhapsodise about township life in South Africa and build a career translating blackness (especially of the difficult, South African type) to the world.

But this was all in my head. Back to reality – the event was an opening at Resolution Gallery, the artist Chris Saunders, the work a series of photographs centred on The Real Actions Pantsula Dance Crew from Orange Farm, Johannesburg. The pantsula movement lives on. Though that petty, drug-free, gun-free almost naive tsotsism that it evokes is long behind us; pantsula dancing has made it into the new South Africa. It is still mostly practised in townships and by young black people, but calling someone lepantsula has become a mostly value-free statement. Mapantsula are a bit rough-and-ready, vigorous and agile, but also quite harmless. Pantsula dance takes us back to a time when traditional forms were moulded to new urban settings, when plaas-jappies were becoming kleva.

I arrived at the opening late (nothing to do with my punctuality issues – I was coming from a motivational session with girls at LEAP school in Linbro Park) and so I missed a performance by the dancers captured in the photographs and a speech by veteran photo-journalist Alf Khumalo. The dancers literally stopped the traffic on Jan Smuts Avenue for their performance. I would have loved to see the reaction of Jozi drivers to such audacity. And I have never really heard Alf Khumalo speak (his appearance in The Bang Bang Club is rather muted) so I was quite disappointed to have missed his speech.

The exhibition is essentially collaboration between photography and dance, a blurring of the lines between these art forms, and also a blurring between different worlds, as the artist explained to me.

The title of the exhibition, S'phara Phara is said to be onomatopoeia taken from the constant, rhythmic sound that trains make when riding over railway sleepers. The word then evolved to describe the sound of dancers’ feet as they dance in the pantsula style. As someone capable of executing exactly one pantsula move, it is not surprising that this is all news to me.

The dancers are shown practicing their art in various settings. They are shown dancing in the streets, competing, showing off but also relaxing in their homes. They are treated as artists, not mere objects. A sense of mutual trust radiates through the images. Saunders’ background as a fashion photographer is evident in this work. He captures style, clothes and body language. His Benettonesque approach (he has actually published some of these photos in Colors magazine) reminds me of Nontsikelelo (Lolo) Veleko.

Many authors and commentators have noted that photography, as a fine art form, is often about artists looking down the class scale and documenting the lives of the poor and the marginalised. This is undeniably the case here though considerable effort has been put into undoing the inequalities that are often inherent in these relationships. Bringing the documented into the gallery space and revealing to them the context in which their images are shown, sharing a percentage of sales proceeds with them; these moves suggest a way of tipping the scales towards collaboration and not exploitation.

I must admit that the charming and observant owner of Resolution Gallery got a sale out of me. I was drawn to a lone dance, caught mid-air, set against a spiritless, unremarkable township backdrop. The visual effect is that of a proud, well-clad dancer soaring above his surroundings. I am looking forward to receiving the latest addition to my collezione, which is becoming dangerously biased towards “modern” media. I will try to remedy this at the Joburg Art Fair, thought that gathering (and most like it, to be just) is not known for being kind to art collectors on a budget.

Poster by Ricardo Fornino, Resolution Gallery.

Resolution Gallery link: http://www.resolutiongallery.com/web//component/option,com_gallery2/Itemid,94/?g2_itemId=2920

The Bang Bang Club - violence and grief

2011-08-02T22:19:00.000+02:00

It is difficult to take good photographs of jewellery. I discovered this a few years ago, working at a gold mining company that ran a jewellery design competition. A colleague who produced brochures and other publications for this competition struggled to find competent photographers of jewellery, especially gold and platinum jewellery. Strangely, these are some of the thoughts that occur to me as I contemplate The Bang Bang Club, a film about four white South African photographers who covered the conflict that erupted in parts of Gauteng and Kwazulu Natal (especially, though other areas were affected) just before our first democratic election.

This country produces gold ore, but we don't produce jewellery. So we don't have great photographers of jewellery. What we do produce, in copious amounts, is violence. The four photographers that are the subject of The Bang Bang Club became internationally acclaimed for their ability to capture scenes of disaster and devastation on film, a skill honed in South Africa. Greg Marinovich won a Pulitzer Prize in 1991 for a picture of the brutal murder of a man believed by African National Congress supporters to be an Inkatha Freedom Party member. Joao da Silva became a contract photographer for the New York Times. He was injured in Afghanistan recently. Kevin Carter won a Pulitzer for a photograph of a starving child, still alive but being followed by a vulture, in war-torn Sudan.

The Bang Bang Club has been criticised for not providing enough context about the time period it captures. I don't fully agree with this point. The film is not about that vicious pre-election violence of the early nineties. It is about those four photographers. That being said, I am sure it must be confusing to many viewers that black South Africans were slaughtering one another in the dying days of apartheid. This conflict happened during my lifetime and though I know enough of what happened to make sense of the film, I do have many questions about that time. Someone who didn't live through that is likely to be even more perplexed.

Growing up in Leboneng in Hammanskraal, we read and heard about "black-on-black" violence. Hammanskraal is scarred by apartheid, but compared to many other places in this country; it was not in the direct line of fire. For most of my childhood, our village seemed to exist outside the mainstream of South African life, with its small educated elite consumed by intense academic and economic competition.

The politically active people I knew in Leboneng had a black consciousness bent and supported the Pan Africanist Congress. To the extent that we owned the plots we lived on, we had some land, but most families in the area had also lost far more land. The PAC spoke a language the people of Leboneng understood. The ANC and the IFP, their politics and their conflicts, were not as easily accessible. I can't say many people in the area had a deep understanding of how and why ANC and IFP supporters could do this to one another.

Will there ever be an adequate account of what happened and why it happened? The consensus, for now, seems to be that the apartheid government used the Inkatha Freedom Party (IFP) to wage a proxy war against the ANC.

My mother had experienced Inkatha violence as a student at the University of Zululand in the 1980s. Back then, the alliance between the IFP and the apartheid government stemmed from Buthelezi’s attempts to hold on to power as a homeland leader and to quash all political opposition. The apartheid government was only too happy to assist, and began to see the IFP as a front it could use to suppress anti-apartheid movements, especially the ANC and the UDF.

Watching the Bang Bang Club, my mind wandered to the history of the time and to my life in those years. I think I could read all the analysis in the world, and I would still not be able to process what happened in the early nineties. It is also quite astonishing that this country went through such grotesque violence and not much has been done to deal with individual and collective post-traumatic stress.

The book that Greg Marinovich and Joao Silva wrote about their experiences is titled The Bang-Bang Club: Snapshots from a Hidden War. A hidden war indeed. All that grief, shame, regret, survivor’s guilt and pain remains unexamined, unresolved and hidden.

Like Fred Khumalo, I was also taken aback by the way the great photographer Alf Kumalo is depicted in the film. His parts are pathetic. He is, simply put, the wise black elder who makes white people who have wandered into a black world feel welcome. He is the buffer between the well-meaning members of the "Bang Bang Club" and the young angry “militant” who wants to have a debate about the meaning and role of their work. Quite a scene to watch soon after Mandela day.

In his review of the film, Fred Khumalo tries to fill in the blanks: "Those of us who have been around for some time in this crazy trade of words and pictures know that Oosterbroek, for one, spent many hours learning from Kumalo - about the finer points of photography, but also survival tips in the hot spots where the younger man was robbed of his wife's car, was shot and generally abused by fighters across the divide."

The Bang Bang Club does a very good job of putting the viewer in the photographers' shoes. The scenes are sickening, but I think these reproductions of the violence of that time should be shown. Violence still stalks this country. I’m sure there are more prizes to be won for photographers working in Diepsloot, for instance. Every day there are reports of violent confrontations between the people and police, between residents and criminals, between locals and those who are deemed to be foreigners, between workers and employers.

South Africa is in a state of perilous socio-economic disequilibrium, and to get from here to a more balanced future will require sustained effort, innovation and ruthless honesty. Papering over the wounds of the past makes it difficult to move forward. It also makes us all vulnerable to being exploited by opportunists who will stoke that pain at convenient times, knowing that people are still wounded.

Healing is a continuous process. There is a view that the Truth and Reconciliation took care of everything, but that can’t be so. It was a noble beginning. There are children who are direct survivors of all those massacres, who were still children even when the TRC process was underway. There is also a lot that happens in public life and debate that suggests that much self-loathing, insecurity and guilt that has been internalised. And people shouldn’t have to apologise for grieving their losses.

Greg Marinovich’s blog:

http://www.gregmarinovich.com/BLOG/2009/04/shame-and-anger/

NPR interview with Greg Marinovich and Joao Silva (including a discussion of Silva’s injuries in Afghanistan)

http://www.npr.org/2011/04/21/135513724/two-war-photographers-on-their-injuries-ethics

Fred Khumalo's review: http://www.timeslive.co.za/sundaytimes/2011/07/17/bang-bang---and-credibility-s-dead

Walmart continued...government applies for a review of the Competition Tribunal's decision

2011-08-02T16:34:00.000+02:00

GOVERNMENT’S POSITION ON WALMART / MASSMART MERGER (press release)

Government has noted the media reports and editorials regarding its application for the review of the Competition Tribunal’s decision on the Walmart/Massmart merger. It is important to put Government’s position into perspective.

Government’s review application points to serious flaws in the Tribunal’s process, including the inadequacy of the Tribunal’s order relating to discovery (the Tribunal allowed only some of government’s requests for information) and prejudice caused by limitations imposed on the time allowed for witnesses to make oral submissions and also the number of witnesses allowed (the hearings process). Government has set out in its papers why these defects affected the ability of the Competition Tribunal to properly consider the potential damage of the merger and to impose appropriate conditions to mitigate the risk.

The main risk to

South Africa

that the merger poses is an increase in imports by Walmart/Massmart causing a decline in local manufacturing and production, across a wide range of consumer products including in agro-processing, the furniture industry, electronics, plastics and household goods as well as clothing and textiles. These effects, if realised, will lead to the closure of a number of local businesses and local job losses.

In February the Competition Commission recommended the merger without conditions on the understanding that Government-brokered talks with Walmart/Massmart would yield concrete results regarding local procurement. But Walmart/Massmart would not move beyond vague undertakings.

Through its engagement in the Tribunal’s hearings, Government was able to put pressure on Walmart/Massmart to table concrete undertakings, which they did on the final day in closing argument, and the Tribunal made those as conditions in its order. Government had sought a wider set of conditions that included commitments to avoid large-scale job losses in the Massmart supply-chain. It is government’s view that the conditions imposed will prove to be insufficient. A R100 million supplier development fund could pale into insignificance given the likely impact of a substantial shift to imports by the merged entity.

The sheer scale of Walmart’s international operations made government’s intervention necessary. Walmart’s revenue is estimated to be $408 billion - larger than South Africa’s GDP. In 2004, Walmart, if it was measured as a country, would have been China’s 8^th largest trade partner and would have a GDP larger than 75% of countries worldwide. In 1995 no more than 5% of Walmart products were imported; by 2005 this figure had increased exponentially to 60%. Walmart’s procurement division employs 1400 employees sourcing from 6000 factories across the world, though largely from China.

Government believes that given Walmart’s global purchasing power, the merged entity will significantly increase imports and reduce purchases from local suppliers in

South Africa

This will affect entire value chains from the suppliers of raw materials and components to the producers of the finished product. Government believes a ripple effect in the sector is inevitable – competitors of the merged entity will also respond by importing more and procuring less from local suppliers. Evidence tabled before the Competition Tribunal by one major competitor confirms this assessment.

The Government departments’ intervention must be seen in the context of the economic situation in the country. South Africa ranks amongst the ten countries worldwide with the lowest level of employment. Less than half of all working-age South Africans are employed. Moreover, the economic downturn destroyed a million jobs and employment creation only returned at the end of 2010, more than a year after the economy began to grow again.

The benefits of direct investment to establish new enterprise and production are well known and undisputed. The benefits of mergers and acquisitions by foreign or indeed by local companies are however less assured. That is why the law requires that the Competition Commission investigate these deals with a view to protecting the public interest. In the case of Walmart taking over Massmart, Massmart was already more than 70% foreign owned by institutional investors before the acquisition, so this case is not about foreign investment per se.

Government’s approach is in line with what happens in many countries elsewhere in the world. Many jurisdictions impose a public interest test on foreign direct investment. Canada’s Investment Canada Act is an example. In some instances transactions are prohibited or conditions imposed upon them. In the United States, for example, New York City, one of the most significant commercial centres in the world, prohibits Walmart from operating in its area. In

Germany

, prior to its withdrawal from that country, the Germany Supreme Court found Walmart guilty of illegal predatory pricing of certain products.

Government would like to emphasise that it fully supports a transparent and expeditious merger review process, in which all key stakeholders, including Government, can engage meaningfully in order to ensure outcomes which are pro-competitive and supportive of employment in

South Africa

. Government respects the independence of the Competition Tribunal, but may take a different view of a particular merger. Government is duty bound to advance the public interest in mergers that have such far-reaching effects as the Walmart one, and has the opportunity to do so through the processes of our law.

ISSUED BY THE ECONOMIC DEVELOPMENT DEPARTMENT, THE DEPARTMENT OF TRADE AND INDUSTRY AND THE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES

Cecil John Rhodes (I)

2011-06-12T16:57:00.000+02:00

A quote from Phyllis Ntantala's must-read autobiography "A Life's Mosaic":
"When we turned to South Africa it was then that I understood that, in fact, the basis of apartheid was laid by the English, before the turn of the twentieth century. Reading the correspondence between the Colonial Office in Britain and the government in Cape Town, as well as debates in the Cape parliament, was very revealing. On one occasion Cecil John Rhodes, then prime minister, warned his fellow whites: 'I have just returned from Transkei and found there huge institutions, where they are teaching the native Greek and Latin, producing excellent fellows, parsons by the dozen. But they are overdoing it. Those men will soon agitate against the government.'

When he died, Rhodes left the fortune he made from his mining interests in Southern Africa to fund a scholarship that sent students from various British colonies and territories, and Germany, to study at Oxford. This was to become the well-known Rhodes Scholarship. By the time I, a native, became a Rhodes Scholar the world had moved on and we jokingly referred to our benefactor as Uncle Cecil and didn't lose much sleep from taking money from this estate. But history matters and it is always with us. Halfway through this clip produced for the Rhodes Trust, I talk about being a Rhodes Scholar:

http://www.rhodeshouse.ox.ac.uk/page/trudi-makhaya

My friend Muloongo Muchelemba talks about what inspired her to apply to the scholarship here: http://www.rhodeshouse.ox.ac.uk/page/muloongo-muchelemba and activist Kumi Naidoo recounts arriving at Oxford after having been on the run from the apartheid police: http://www.rhodeshouse.ox.ac.uk/page/kumi-naidoo

Applications open for the 2012: http://www.rhodeshouse.ox.ac.uk/page/southern-africa-including-south-africa-botswana-lesotho-malawi-namibia-and-swaziland

Walmart Massmart Government Statement (Economic Development, Trade & Industry, Agriculture Forestry & Fisheries)

2011-06-01T10:03:00.000+02:00

Press statement on Competition Tribunal decision on Massmart/Walmart.

31 May 2011.

The Competition Tribunal today released its decision on the merger between Walmart and Massmart and approved the merger subject to four conditions.

The conditions imposed on the parties are that the merged entity:

• may not retrench workers for a period of two years;

• must give preferential employment opportunities to 503 workers retrenched during June 2010 (and take into account their years of service in Massmart);

• honour existing labour agreements and not challenge SACCAWU’s role as the collective bargaining agent for at least the next three years; and

• set up a R100m Fund to support local suppliers and small businesses as well as provide training to South African suppliers on how to do business with the merged entity and Walmart.

The Competition Tribunal will supply reasons for their decision on or before 29 June 2011. Parties to the merger, trade unions or government departments may then lodge an appeal to the Competition Appeal Court should they be dissatisfied with the ruling.

Government has taken careful note of the decision of the Competition Tribunal as well as the conditions that have been imposed.

The three government departments with responsibility for employment and industrial development along the Massmart supply-chain, namely the Economic Development Department (EDD), Department of Trade and Industry (dti) and the Department of Agriculture, Forestry and Fisheries (DAFF), joined the proceedings at the Competition Tribunal in order to request conditions to be imposed on the merger. The requested conditions related to local procurement, job losses, labour rights and small business development.

Government had originally engaged the merger parties to attempt to secure commitments that could be incorporated as conditions to the transaction. The merger parties refused any conditions during the discussions until government decided to participate in the Competition Tribunal hearing, secured discovery of key documents through the legal process and led evidence of the impact that the merger without conditions will have on the public interest matters set out in the Competition Act. But for government’s intervention, the proposed transaction would have proceeded without any proper ventilation of these issues or any measures or conditions to protect South African workers and local manufacturing capacity.

We welcome the recognition by the Competition Tribunal that a merger as contemplated should be subject to conditions. As noted, the merger parties had refused to voluntarily offer conditions at the commencement of the discussions prior to the Competition Tribunal hearing. The Competition Commission had previously recommended the approval of the transaction without conditions but changed its position in favour of conditions, based on new evidence that had emerged during the proceedings at the Competition Tribunal.

We welcome the decision by the Tribunal that these conditions should cover areas such as commitments to avoid job losses, protection of worker rights and measures to promote procurement of locally-manufactured goods. These matters are vital to ensure that we achieve the goal of increasing employment and decent work opportunities in South Africa.

We will study whether the specific measures set out in the conditions adequately meet the public interest tests set out in the Competition Act and whether they will secure the desired outcome, in particular ensuring that South Africa is not faced with large-scale job losses in supplier industries to Massmart/Walmart (both in agriculture and manufacturing) and that the merged entity provide real and effective support for local manufacturers and small manufacturers.

We will meet with Walmart/Massmart to discuss their commitments in the light of the conditions that the Tribunal has imposed and based on the statements made by Massmart and Walmart executives during the Competition Tribunal proceedings that they do not intend to materially increase the level of imports.

Based on the outcome of the study of the conditions and the responses of Walmart/Massmart, we will decide on the next steps to take. Government reserves its legal options at this stage.

For information contact Jaffer Zubeida 082698677 or Sidwell Medupe 0794921774

Issued by the Ministers of Economic Development Mr Ebrahim Patel, Trade & Industry Dr Rob Davies and Agriculture Forestry and Fisheries Ms Tina Joemat-Pettersson.

Walmart Massmart Tribunal statement

2011-05-31T14:25:00.000+02:00

Tribunal statement on the conditional approval of the merger between Wal-mart Stores Inc. and Massmart Holdings Limited – 31 May 2011

Introduction

The Competition Tribunal has today approved the merger between Wal-Mart Stores Inc. of the United States (“Walmart”) and South African retailer Massmart Holdings Limited (“Massmart”), subject to conditions which are contained in the attached annexure.

The merging parties had initially argued for unconditional approval of the merger, a position initially supported by the Competition Commission. Opposed to this view were three government departments, Economic Development, Trade and Industry and Agriculture, Forestry and Fisheries, who had proposed that the merger be approved, but subject to conditions to protect the public interest. Also intervening were the South African Commercial, Catering and Allied Workers’ Union (“SACCAWU”) which is recognised by Massmart, the South African Clothing & Textile Workers’ Union (“SACTWU”), other unions organising workers in industries which sell products into the retail sector and their federation Congress of South African Trade Unions (“COSATU”). The unions had proposed that the merger be approved subject to a wide range of public interest conditions, but that if this was not possible, that the merger should be prohibited.

The evidence that the Tribunal considered differed in important respects from that considered by the Competition Commission during its earlier investigative process. In our proceedings we have had the benefit of further discovery of documents at the instance of the government departments’ team, and the testimony and examination of witnesses brought by the intervenors.

This explains why the Commission changed its recommendation in argument at the end of the hearing, from one of unconditional approval to one with suggested conditions to meet the retrenchment dispute and the concerns over collective bargaining rights. We commend the Commission for not taking a static approach to the proceedings, but we believe that the undertakings furnished by the merging parties largely address the Commission’s concerns.

The Tribunal process has also been instrumental in raising issues of concern that, as we consider more fully below, the merging parties have seen fit to react to by making certain undertakings, albeit that they do not concede that they were legally obliged to do so. We appreciate the testimony of witnesses and experts put up by all the parties in these proceedings.

Outcome

It is common cause that this merger raises no competition concerns. Walmart does not compete with Massmart in South Africa and its only presence in the country is a small procurement arm that sources local products for its stores globally. The merging parties contend that the merger will indeed be good for competition by bringing lower prices and additional choice to South African consumers. We accept that this is a likely outcome of the merger based on Walmart’s history in bringing about lower prices. However the extent of this consumer benefit is by no means clear – Walmart itself has not been able to put a number to this claim, only that it is likely.

Given our highly concentrated retail market, the strengthening of Massmart, which is in some product categories only a number four or five size retailer, measured in terms of sales, is likely to benefit consumers by strengthening rivalry and improving choice.

This merger will also likely have certain losers. Walmart’s proposed entry into areas presently under served by large retailers may displace certain small businesses and in others, reduce the market share of some of the major retailers. That is an inevitable consequence of the competitive process.

We are however required by the Act not to be indifferent to certain public interest concerns caused by a merger, if they are substantial. The purpose of public interest concerns is not to protect firms from losing out to market forces, but to protect a substantial public interest. However the Act does limit our ability to remedy public interest concerns in two ways. First, the Act recognises only a limited set of public interest concerns as specified in the Act. Second, the public interest concerns must be merger specific. Expressed in less technical language, unless the merger is the cause of the public interest concerns, we have no remit to do anything about them. Our job in merger control is not to make the world a better place, only to prevent it becoming worse as a result of a transaction. This narrow construction of our jurisdiction has not always been appreciated by some of the intervenors who have sought remedies whose ambition lies beyond our purpose. It is not our task to determine whether those ambitions are legitimate public policy goals; only whether they lie within our powers.

On the final day of this hearing the merging parties offered certain undertakings to the Tribunal which they agreed might be imposed as conditions for the approval of the merger. These undertakings were made to address certain labour and local procurement concerns raised by intervening parties during the course of the hearing process. The merging parties made it clear that in their view the undertakings were not required legally in order for the merger to be approved, but were offered to meet adverse perceptions about the effect of the merger on the public interest.

Given that the merging parties have tendered certain conditions, our task in assessing the merger has changed in emphasis.

The Tribunal will thus take the approach that it must examine if the undertakings adequately remedy the merger specific public interests concerns raised, on the assumption that they have been established, and provided that their remit is within our jurisdiction. We have come to the conclusion that they are adequate.

Conditions

One of the concerns raised by the intervenors relates to the effect of the merger on employment. The effect on employment may not be confined to the jobs of those employed by the merged firm – it may extend to those not employed by the firm, but whose jobs may be threatened as a result of the merger. Further, employment concerns may not only relate to jobs lost, but also, as we will explain in our reasons, an adverse effect on conditions of employment. The remit of how far we can go in addressing these concerns is controversial and we will address this in our reasons. On the assumption that the merger will have certain adverse affects on employment and conditions of employment, we have examined whether the undertakings adequately remedy them.

Whilst Walmart’s expansion plans suggest that retrenchments of the existing workforce are unlikely and that increased employment is more likely, the parties have given an undertaking that there will be no retrenchments at Massmart for two years for merger specific reasons. Although the undertaking is diluted by a redeployment exception, we find that as post merger retrenchments are not likely, the undertaking is adequate.

A hotly contested issue during the merger was whether certain retrenchments that took place in June 2010 affecting certain Massmart employees were merger specific. Whilst the retrenchments coincided with the commencement of the merger negotiations there is no conclusive evidence that it was the cause. Despite this the merging parties agreed during the proceedings to make an undertaking that they will give preference to re-employing these retrenched workers if vacancies arise and to recognise past seniority for this purpose.

A major concern articulated by the union intervenors was that the merger would likely lead to a diminution of their collective bargaining rights. The undertaking to honour collective bargaining rights presently enjoyed addresses this concern. It goes further in undertaking not to challenge the status of SACCAWU as the largest representative of workers in its divisions and invites us to determine the appropriate period for which this condition should hold. We have determined that it should operate for three years.

Finally the parties offered an undertaking to address the local procurement concern raised by the intervenors. Intervenors were concerned that as a result of Walmart’s global purchasing powers, which dwarf those of Massmart, the merged firm would be able to source cheaper imports and hence switch some of Massmart’s procurement away from local manufacturers to imports, with adverse effects on those employed in these sectors. No specific figure could be given to this apprehended substitution by the intervenors, and the merging parties have contested this, alleging that at worst local importers would be replaced by direct imports and that there would not be a significant decrease in net procurement from local manufacturers. Again this concern is the subject of indeterminate evidence from either side. However, even if the concern is valid, the undertaking for an investment remedy as suggested by the merging parties is in our view appropriate, proportional and enforceable. It avoids concerns that the conditions suggested by some intervenors to impose a form of quota of mandatory domestic purchases on the merged entity, could violate the country’s trade obligations, be anti-competitive or be incapable of practical implementation.

Furthermore the investment undertaking is a more positive response to the procurement concern. Instead of insulating local industry from international competition for a period, it seeks to make local industry more competitive to meet international competition. Whilst at a macroeconomic level the remedy is modest, at the level of a single firm commitment it is not. Expenditure of R 100 million over a three year period is significant. Further the remedy seeks to engage those very critics of Walmart in the decision making process over the disbursement of the funds, including representatives of small, medium and micro enterprises (“SMMEs”).

We note that the conditions have met some, but not all, the intervenors’ expectations of what conditions should be imposed. We will explain in our reasons why some of these expectations are misplaced.

Because the undertakings are made as conditions for the approval of the merger they are enforceable. Non-adherence can lead to serious consequences for the merged firm, including the risk that the merger could be undone. This illustrates that the parties view the undertakings as a serious commitment and not a public relations gesture.

For this reason we have decided to approve the merger subject to the undertakings made by the parties becoming conditions for the approval.

Reasons for the decision will be released on or before 29 June 2011.

Ends

_________________________
Tribunal website: http://www.comptrib.co.za/

When we were proud...Jackson Hlungwane, the late master of sculpture

2011-05-22T22:39:00.001+02:00

Reading the amazing archives on the artthrob website I came across this amazing anecdote about the late great Limpopo sculptor, Jackson Hlungwani. In 1993, as it was clear that South Africa was firmly on the road to democracy, local artists were invited to the Venice Biennale for the first time in over two decades. Some 27 artists were selected to represent South Africa, but no state funding was available for their expenses.

At the last moment, the organisers (of the South African contingent) realised that none of the selected black artists would be able to fly to Venice. A ticket was swiftly sent to Jackson Hlungwani. The bearer of this unsolicited gift found Hlungwani working at his home in the north. He declined the ticket and replied: "The message is good, but the radio is bad." I have no idea what that means, but it's clear that this great artist was not going to interrupt his work for anyone or anything, especially not to be some tokenist prop, an afterthought in someone else' scheme...He had better things to do with his time.

A 1994 New York Times article on Jackson Hlungwani starts with these striking paragraphs:

"AS YOU GO NORTH from Johannesburg, the landscape grows in scale and grandeur, and you begin to feel that you are incontrovertibly in Africa: the vague Europeanizing influence that is so powerful in Cape Town and half-successful in Johannesburg disappears. If this area is a hotbed of gross Afrikaans conservatism, that must be because it is so obvious here that you cannot shut out Africa with a high fence or a well-planted garden of foreign herbs and flowers -- and Africa, taken in its entirety, is not only beautiful, but also frightening to most whites.

The road from the town of Louis Trichardt to the Venda homeland climbs slowly into the gentle hills south of the Limpopo River. When you arrive in Venda itself, you are made quiet by it; an air of mystery and joy and of a dialogue of spirits dwells over Venda the same way an atmosphere of excitement and bustle and urban decay hangs over New York." (Andrew Solomon)

I find these words to represent a certain, irritating romanticisation of "the real Africa" but I appreciate their beautiful description of that wonderful province to the north. Back to Hlungwani's words, there are many times in my life that I wish I could have said - the message is good, but the radio is bad. And then carried on with my business.

Jackson Hlungwani
God and Christ 1990
Carved and stained wood
Source: http://www.artthrob.co.za/00mar/news.html

Andrew Solomon's 1994 article on South African artists: http://www.nytimes.com/1994/03/27/magazine/the-artists-of-south-africa-separate-and-equal.html

Solitude, almost

2011-05-01T13:27:00.003+02:00

07/04/2011
St Peter's Square
Vatican City

An inspirational school educating Alexandra's youth (guest post by Liesle Barrath)

2011-03-22T20:54:00.002+02:00

A story in the New York Times, and our curiosity about the state of education in our country, led Trudi and I to LEAP school one Saturday in March. We were there to learn more about this successful school. Given our love of reading, and impressions from Trudi's earlier visit to the school, we also had an idea about how we might get involved and make a contribution to LEAP. In spite of the achievements we had read about, the school was operating with a very limited library.

We were met by Dr Naidoo. Previously a headmistress at a school in Durban, Dr Naidoo lectures English at UNISA and teaches at LEAP School on a part-time basis. Ms. Mofokeng-Moatshe, the headmistress at LEAP, arrived shortly afterwards with a presence and stature that emitted dedication, discipline and a genuine love for teaching and nurturing.

It was a Saturday morning but the school was in full swing. The headmistress, teachers and students were at school, engrossed in their Saturday lessons. This school, which relies mostly on donations and sponsorships from large corporates and individuals to supplement the modest fees paid by parents, gives children from Alexandra a fighting chance at getting a proper education.

The classrooms and administrative offices of LEAP School are contained in an old house on a smallholding in Linbro Park. In these classes, retired teachers, Teach South Africa members, budding student teachers and professionals transfer knowledge and skills to students in Grades 10, 11 and 12. In 2010, the Grade 12 class achieved a 100% pass rate in the GDE Matric Exams.

On a tour of the premises, Dr Naidoo led us to the English classroom that includes the current library – a tiny side room housing metal shelves filled with a limited range of rather old children’s story books and journals. I realised our initial idea of building a store of books and reference materials would need to be expanded to include the real bricks and mortar as well. But for now, our efforts will be directed towards resourcing this small library with quality books. We are brainstorming various fundraising ideas, and will be in touch with our plans. Please let us know if you would like to get involved.

Links

LEAP website http://www.leapschool.org.za/

New York Times article on the school http://www.nytimes.com/2010/09/09/world/africa/09safrica.html?_r=1

Teach South Africa http://www.teachsouthafrica.org/

Liesle Barrath

Four women...what do they call me?

2011-03-08T01:01:00.004+02:00

Weapons of mass erasure

2011-01-16T22:48:00.001+02:00

Photo: Lerato Moloi, the first black model to represent Elizabeth Arden. Photo source: www.timeslive.co.za

Ancient beauty -
I dare not see you,
I fear to embrace you,
I distance myself from you.

You confront me with your blatant African-ness,
It renders me speechless.

I want to call you graceful
I want to describe your bewitching eyes
your succulent lips, your lustrous skin.
I want to write songs about you.

But who am I to tell the world about you?
I, silent daughter of Africa,
who has succumbed to weapons of mass erasure.

I remember you, faintly.
In your face I glimpse the grandeur of centuries.

What is the punishment for failing to see the wonders around you?
Is that punishment in itself?

Dambisa Moyo (when I grow up....)

2011-01-14T02:55:00.001+02:00

Openly appreciating the magnificence of dark skin...and other wishes for 2011

2011-01-01T17:52:00.002+02:00

This is a list of my wishes for this coming year, and quite possibly, for many more years to come. It might appear somewhat random. But this is what I hope for myself and for all my friends in this world that we live in. This list is in no particular order.

1. We live in a world where information is controlled and stereotypes are thrown about as fact. I wish that this year we will not surrender to the lies and distortions that are told about us and the communities we care about; be they untruths about our continent, country, race, religion, gender, sexual orientation, political affiliation or any other label and association that make us vulnerable to demonisation. I wish that each of us will always have the courage and the creativity to write our own story, whoever and wherever we may be in this world.

2. We live in a world filled with soul-numbing distractions. I wish that in this coming year we will strive to be present to ourselves and to our purpose. I wish that we will be committed to loving our neighbours. I wish that we will find ways to be compassionate, hopeful and rich human beings who are not seduced by superficial wealth but are open to the magic and abundance of life. I wish that we will be able to ignore the seductions of mindless consumption and rather dedicate ourselves to building enduring legacies.

3. We live in a world that is still riven by inequality between men and women, a world that trivialises women and holds them to an arbitrary standard of beauty. I wish that we will always remember that women matter; that they have always mattered economically (in paid and unpaid ways), spiritually, intellectually, culturally and in many other ways that we can’t fully enumerate. I wish that we will open our eyes to the beauty that lies beyond the catwalks, movie screens, music videos and magazines. I wish that the magnificence of dark skin will be openly appreciated and neither fetishised nor feared. I wish that we will not be intimidated by big women, tall women, outspoken women, happy women, kinky-haired women, albino women, freckled women, stunning women, disabled women, ordinary women…but that we will look at all women, properly, and not simply erase them from our view if they are not ‘easy’ on the eye, ‘easy’ on us, ‘easy’ to deal with...

4. We live in a world where billions of people are simply written off; as South Africans we have no qualms about dismissing whole generations of people as ‘lost’. I wish that we will stop confusing poverty with stupidity and ignorance. I wish that we will understand that even if the material circumstances might be poor, the mind can be rich still, that the spirit can remain unbroken by oppression and squalor and that the poor deserve a future too.

Home is where the heart is - Global Alumni - Oxford University

2010-12-10T00:02:00.000+02:00

Zanele Muholi's latest work

2010-12-04T00:22:00.000+02:00

Award-winning photographer Zanele Muholi is fierce...this is her response to Sushi-gate...an image of two people eating boerewors and offal off her body.

Zanele Muholi, 'I'm just doing my job', 2010, C-print, 45.5 x 60cm
Photo credit: Robert Hamblin
The gallery: http://www.michaelstevenson.com/contemporary/exhibitions/summer2010/index.htm
The story: http://www.mg.co.za/article/2010-12-02-from-sushi-to-sausage-kunene-gets-a-lashing
And the original party image that had feminists, unionists, the struggling middle classes, non-conspicuous consumers, communists, the anti-black diamonds and a whole lot of other people pissed of:

http://www.timeslive.co.za/iLIVE/article737804.ece/Mr.-Sushi-should-hang-his-head-in-shame--Reader

Interesting day in competition economics

2010-11-30T21:59:00.004+02:00

It's been quite a day in the world of competition economics and policy. The EU has initiated an investigation into Google for alleged abuse of dominance (the company is estimated to have over 90% of the online search market in almost all markets that it operates) in online search services.

Three European complainants, all involved in search, have alleged that Google ensures that their rankings on Google searches are unfairly low. The complainants are competitors to Google, mainly providing niche search services in specialised areas, and claim that the company prejudices them in favour of its own services. Other allegations include that Google has manipulated the quality scores of its competitors (which determines the terms they get from advertisers); that it has entered into exclusivity agreements with some of its advertisers and also with computers and software vendors with the aim of excluding competing search tools and finally that it has undermined the portability of online advertising platform data so as to exclude online search competitors.

When I first heard this, I immediately thought that if this goes anywhere, it will become the Microsoft case of our generation. Ironically, one of the complainants is a Microsoft subsidiary (Ciao.de)! Do significant anti-trust investigations signal a company's descent from the innovation peak?

Locally, the big story is the confirmation of the settlement that Pioneer has reached with the Competition Commission for its contraventions of the Competition Act - price fixing and market allocation in flour and maize; collusion in flour, bread and maize, through information exchange; exclusionary conduct against small independent bakery in the Southern Cape and anti-competitive conduct at various levels throughout the poultry and egg supply chains.The company has already paid a R196m fine for its involvement in the bread price-fixing cartel.

The settlement package includes a R500m fine, a commitment to reduce its gross margins on the price of bread by R160m and to increase capital expenditure by R150m. The Economic Development Department will also submit a proposal to Cabinet for the creation of a R250m agro-processing fund to stimulate entry into this sector.

Policy innovation is at the heart of the matter here. As the joint press release between National Treasury, Economic Development Department and the Competition Commission states, this is an unprecedented manner for dealing with competition fines and remedies. This is no ordinary fine.

EU press release on Google investigation: http://europa.eu/rapid/pressReleasesAction.doreference=IP/10/1624&format=HTML&aged=0&language=EN&guiLanguage=en
Guardian article on the investigation: http://www.guardian.co.uk/technology/2010/nov/30/google-investigation-eu-british-complaint.
Pioneer settlement press release: http://www.compcom.co.za/assets/Uploads/AttachedFiles/MyDocuments/Joint-statement.pdf

The global trade in human hair

2010-11-25T23:30:00.002+02:00

The New York Times recently ran an article on the trade in blonde hair extensions harvested off the heads of women from the former USSR. There seems to be a booming trade for blonde locks, as these are the most rare, for obvious reasons, and also increasingly popular thanks to the likes of Paris Hilton and Jessica Simpson.

Now, I don't judge when it comes to hair. I straighten my hair with chemical products and flat irons. Because
I have very thick hair (what they used to call kaffirhaar pre-Mbeki era), I have never ventured into the world of hair extensions. Having to deal with extremely rapid 'growth' (roots) under the extra hair would destroy the value proposition for me. But I can see the point of extensions - the convenience, the flexibility, the possibilities!

As the article mentions, black women (African-American in this case) have been rocking hair extensions for what seems like forever. Jo'burg women have also embraced hair extensions en masse. It's not just Khanyi Mbau dropping over R10 000 on hair; I remember reading an article by an entrepreneur who shared that having a good weave sends the message to her associates that she means business. Apparently, it's an investment darlings! When I first heard of 'human hair' being sold in shops back in the 90s, I never imagined that it was actual human hair taken off someone else's head. I thought that it was just really really authentic-looking synthetic hair. It took some time for that penny to drop.

What I find interesting about this New York Times article (and the comments) is the underlying theme of rich white Western women exploiting poor white women. A hair 'processor' is quoted as saying: "This is capitalism...the people with money want to distinguish themselves from the people with no money. Why does one woman sell her hair to another? The person with money wants to look better than the person without money.”

I have never really heard this exploitation theory being advanced against the thousands, if not millions, of black women who wear hair from India, Brazil and other black hair producing countries. Of course this article is about blonde hair destined for white consumers and hence the discussion of white-on-white exploitation. But I wonder, what about the trade between women of colour - is it improper or just "South-South" trade? See the article here: For Poor Russians, Blond Hair Is a Snippet of Gold - NYTimes.com

The nationalisation debate

2010-11-17T20:08:00.004+02:00

A few weeks ago, I dipped my toe into the nationationalisation debate by writing a guest blog post for award-winning political site wonkie http://www.wonkie.com/2010/10/11/nationalisation-of-mines-in-south-africa/#comments. In short, I think the case for nationalising the mines is pretty weak. As for those who quote the Freedom Charter - I think it's a beautiful document, but it should be seen more like a sacred text, it is not meant to be taken literally. The people shall govern - but the people shall govern pragmatically.

I have been taken aback by the comments section (137 so far) - they range from shocking, hilarious, racist, religious, angry, irrelevant, I could go on. I know comments sections are notorious for people simply letting loose, but I'm worried about the level of discourse in our country. I can't believe that this is still how we talk about race (and why do we have to bring race into everything?).

Girl about town

2010-06-05T20:07:00.002+02:00

In spite of battling the 'change of season blues', I managed to go out twice during this chilly week. It would be criminal to stay at home given the amazing buzz in the city. The world is finally upon us and the atmosphere is amazing. Even the queue at the grocery shop at the local mall (which has a hotel attached to it) is cosmopolitan – we have got to do something about turning Johannesburg into an international city – all these beautiful languages, these well groomed men (no offence to my brothers, but you know what I mean), this flavour!

It has been ten years since my first graduation ceremony. So it was with some trepidation that I accepted an invitation to attend a graduation ceremony for commerce, law and management graduates at my alma mater, Wits University. I knew the ceremony would cheer me up. I just didn’t anticipate how much Wits has changed.

Graduation fashion has moved on since 2000. We rocked up in long evening gowns and chaste evening shoes. We exuded deference for the institution and tip-toed across the stage when our names were called. Not so for Generation Y. I wished I was graduating on Wednesday night. A noticeable number of women were wearing short, flirty cocktail dresses with sexy high heels. The young graduates were confident; they engaged with the academics capping and robing them and they acknowledged their ululating relatives (yes, ululation at the Wits Great Hall!). They strutted their stuff. And they were quite a diverse bunch. The racial achievement gap is definitely narrowing in terms of the number of black graduates receiving degrees and distinctions. This was just one ceremony and the overall statistics for academic and financial exclusion will no doubt show that we have a long way to go, but we’ve also come quite far.

For the first time in my life, I truly felt the ‘disadvantage’ of age. Here were young people who were raised in a free, more prosperous, more inclusive South Africa. Here were graduates of a far more accepting and more transformed Wits than I ever experienced. I must admit to a pang of inter-generational envy. It was a beautiful evening and I hope those youngsters are going to kick ass in the workplace.

Then on Thursday it was off to an opening for Zwelethu Mthethwa at Circa, that fabulous new gallery space that extends the Everard Read complex. It was my first time venturing into that strange ellipsis off Jan Smuts avenue. There was also an opening for a group photographic exhibition at the Everard Read itself and the art world socialites were out in full force. There were also many tourists about. The highlight of the evening for me came when I crossed paths with one of the greatest living artists of our time! I have chatted to her twice but have seen her around town many times (it could be said that I follow her around at functions – I am not obsessed...). It was packed and she passed by quickly so I couldn’t contrive a conversation with her but just being in the same room with her is good for my soul.

I enjoyed the view from the Circa rooftop. As you go up the spiralling staircase, you don’t realise you are going that high up, so the element of surprise adds to the delight of beholding the night skyline. There were open fires outside, the people were lovely and the wine was flowing.

As for the art, there were some collaboration pieces between Zwelethu Mthethwa and Louis Janse van Vuuren that were rather glitzy and ghetto-fabulous. I also found some of the photography, specifically the interiors, to be too intrusive. There was one picture of a woman sitting on the floor with her legs stretched out before her. She looked ill and her surroundings were very bleak. I am all for realism but these kinds of portraits have to offer a fresh perspective if they are not to be simply depressing. I missed that fresh perspective in some of the photography.

There were other pieces that did make me think, portraits of blue collar workers and living spaces that are lovingly decorated with very modest materials. These were not just bleak - they were beautiful, full of life and arresting. One of the interiors was decorated with wall-paper in the most literal sense – broad, newspaper inserts of supermarket advertorials pasted on the wall. It spoke to me of that tense relationship between economically marginalised people and their material realities and aspirations.

I would have liked to go out tonight but it is more prudent to stay at home and tackle this masterpiece that my mother has been trying to get me to finish for ages; O. K. Matsepe’s ‘Kgorong ya mošate’. I have never studied Sepedi formally so it’s tough. It’s also slow reading because some of the language is so stunning: “Taba ya gago e a kwala, ga e kwale.” I read a line like that, and I have to pause for a minute or two.

The South African middle class (and as for that university degree...)

2010-02-03T17:42:00.000+02:00

Stats SA recently released a paper entitled ‘Profiling South African middle-class households, 1998-2006: http://www.statssa.gov.za/publications/statsdownload.asp?PPN=Report-03-03-01&SCH=4563 as a companion piece to a much larger study entitled ‘Changes in the standard of living among population groups’. These studies draw their data and insights from various nationally representative surveys (October Household Survey, General Household Survey, Labour Force Surveys). It is a short paper and it provides a lot of food for thought for where South Africa is headed. It’s not my general habit to recommend statistical publications for fun reading but this one is worth it.

The study defines a middle class standard of living as “residing in formal housing, having a water tap in the residence, having a flush toilet in the residence, having electricity as the main lighting source, having electricity or gas as the main cooking source and having a landline or a household member having a cell phone.” A household has to meet all these conditions to qualify as having a middle class standard of living. This may not sound like much but the middle class standard of living is actually the highest standard of living group in the categorisation used. Thus as a group, the middle class includes ALL those who meet the requirements set out above. This category, in essence, refers to all those households that have a reasonably stable and comfortable standard of living, as opposed to some relative, median position in society.

Some interesting findings:

The percentage of South African households with a middle class standard of living increased from 23% in the period 1998-2000 to 26% in 2004-2006. So 74% of South African households did not meet the requirements defined above. This is sobering news.

Within this definition of a middle class standard of living, the racial breakdowns are thus: about 85% of White households and 75% of Asian households had a middle-class standard of living throughout the period of 1998 to 2006. Coloured households with a middle-class standard of living increased from 41% in 1998-2000 to 48% in 2004-2006. Almost no rural Black households had a middle-class standard of living. The percentage of urban Black households with a middle-class standard of living rose from 15% to 22%. The study continually differentiates between urban and rural black households because in terms of standard of living, the black community is severely segmented according to geography.

So much for the black middle class! However, the rate of improvement is encouraging. Also, in absolute numbers, the number of black middle class households represents a significant market. There are as many Black middle class households as White middle class households.

The most thought-provoking findings, as far as I am concerned, relate to the returns to education for young adults living in middle class households. Conceptually, returns to education are meant to capture the gains that individuals/households receive from their investment in education. Returns to education are often measured by the marginal improvement in salary that an individual makes with each additional year of education. In this paper, the returns are measured by the likelihood of holding a managerial or a professional job. The methodology in this case appears to be driven by available information from existing surveys and also by the unreliability of self-reported income figures. In a nutshell, the data suggest that young white middle class adults face a higher likelihood of holding a managerial or a professional job than young black middle class adults, even after accounting for differences in educational attainment.

Said differently, even with the same educational qualifications, a young white adult is more likely to hold a managerial or professional job than a young black adult. Five potential reasons are given for this discrepancy: i) quality – the same level of education does not imply the same quality of education; whites continue to have a higher quality of education than blacks; ii) field of specialisation – whites may be choosing more marketable fields of specialisation; iii) qualifications for managerial/professional jobs that may not be captured by educational attainment – blacks may not have the same cultural and social capital required to navigate the managerial world; iv) networks and connections – similar to the previous point, whites may have better access to managerial opportunities than their counterparts from other races and v) discrimination.

Given our history of unequal opportunity, segregation, cultural distance and mistrust and yes, racism, it is not hard to see why all the above factors play a role in this disparity in the returns to education. Different interest groups will latch onto different factors to further their agendas. We have all seen these games being played. There are those who will insinuate that anyone who didn’t attend a formerly white school is unworthy of advancement, irrespective of their accomplishments. There are those who will shout racism from the rooftops. The truth is that the picture is complex and that cheap point scoring will stifle the ability to have a genuine discussion about the challenges in our labour markets.

The paper then presents findings for professional and managerial jobs separately. There is an interesting discrepancy between the returns to education for managerial and professional jobs. Managerial jobs, those jobs were individuals oversee the work of others, are far more likely to be held by whites, even when accounting for educational attainment. Whereas for professional jobs, those jobs requiring a certain, specialised competence and body of knowledge, the returns to education across different racial groups are not radically different. A young white adult with less than a matric is more likely to hold a managerial job than a black young adult with a BA degree or diploma. For professional jobs, such aberrations are not apparent – what the data shows is more along the lines of what you would instinctively expect, albeit with a slight racial bias towards white labour market participants.

Looking at the reasons outlined above for the different returns to education across race, it is probable that the discrepancy in managerial prospects is explained more by factors such as networks, social capital and discrimination rather than quality of education. What is different about managerial jobs as opposed to professional jobs? I suspect, as the paper also alludes, that the issue is linked to discretion and ownership patterns within the economy. Assessing professional skills is subject to less discretion as assessing a person’s potential to lead. And in an un-integrated society such as ours, owners of businesses and representatives of shareholders are more likely to appoint leaders that they are comfortable with, education and potential aside.

The conservative response to this might be to say that perhaps black people, as ‘emerging’ participants in the economy, should enter the corporate world via the professional route, and only aspire to management later. Also, the situation will resolve itself in time - as the number of black entrepreneurs grows, they will employ more black managers (it should be noted that there is nothing in the demographics of many BEE companies to suggest that this would happen). The problem with the conservative gradualist approach is that it legitimises current reservations about black people’s ability to lead and it also cuts them from building business acumen and assets. Being a professional is important and respectable, but being a business leader is what sets individuals on the path to significant wealth creation.

All that being said, one of the fundamental messages of the study is still about education: the quality that is being provided, the mindsets it promotes and the skills that it imparts. On the positive side, it is projected that by 2026, 65% of black households will be leading a middle class standard of living, up from a mere 6% in 1996 and 14% in 2006. This is expected to be not at the expense of other racial groups, with all population groups expected to see increases in the number of households with a middle class standard of living. To have the majority of households having at least a secure and dignified standard of living from which to develop a future would be quite an achievement for South Africa. These projections are based on historical trends so the assumption is that South Africa will continue to be a fairly stable, conflict-free society with a growing economy. We can only hope.

That elusive developmental state

2010-01-07T16:56:00.001+02:00

The East Asian ‘miracle developmental state’ was all the rage when Ms. Hope Flower was in graduate school. I recently visited one of the tigers (Singapore) and this got me thinking about those debates on the drivers of East Asian economic success and the replicability of their model to sub-Saharan economies.

In the circles I run in, Singapore suffers from a slight image problem. It is viewed as staid, authoritarian, too clean! I must sheepishly admit that I think it is a wonderful place. I love the sense of order, the calm and the overall efficiency.

In my mind, the debate over East Asian economic development was once so heated because it is quite a complex story and yet people only saw elements of it, usually those elements that justified their prejudices. Also, coming of age at a time where international development was becoming a prominent and divisive issue, many leaders and thinkers were tempted into looking for a simple answer to global poverty. There was the ‘Washington consensus’ crowd on one side, and the anti-globalisation protestors on the other side of the picket line. There was also the message that you have to choose a side. Except many economic issues are just not amenable to that kind of debate. The world is a poorer place because of this strange and persistent polarisation in economic thinking.

The Singaporean story certainly draws from both sides of the picket line. There is the legendary investor-friendliness and export orientation of this city-state economy. There is also extensive government intervention. This is the essence of the ‘developmental state’. This ideal of the developmental state was hotly pursued by the Mbeki administration in South Africa. The current administration has also not renounced this ambition. The problem, in South Africa, is that we just haven’t got the balance right. Business clings to market fundamentalism, government rants about ‘the role of the state’. To see the big, holistic picture is to be a very lonely voice.

In its early days, Singapore was pragmatic. It capitalised on its strategic location by importing raw materials and manufacturing them for export. It is also ideally positioned to play a financial and professional services hub role for its region. The country cultivated allies to further its international ambitions. Among these is a (little known) Dutch economist named Albert Wisemius who helped to develop the country’s economic plans and to sell it to the West. He also gave quirky advice. It is said that he convinced the post-independence administration to keep a prominent statue of Raffles (the British colonial administrator) standing so as to give the signal that Singapore, with its new government was not going to turn its back on the Western world. I find that as Africans, we are often too ‘wounded’ by history to play the economic game and make some pragmatic noises and compromises (the right compromises – not corrupt selling out), and by the time we are forced into the game, things are so bad that real negotiation with the West (and other economic powers) is not possible.

Of course in countries such as Singapore, the civil service attracts the bright and the ambitious, not the most intent on rent-seeking. (In South Africa, it’s hard to begin having this conversation about an elite civil service in earnest because sadly almost everyone mistakenly believes intelligence and ambition to be a function of whiteness). The market friendliness of the Singaporean state co-exists, then and now, with an interventionist state. Two vehicles that I find interesting in this regard are the two state run investment portfolios; Temasek, which is a variant of a sovereign wealth fund and invests on behalf of the Treasury and the Singapore Government Investment Corporation (GIC), which invests government’s foreign reserves.

Temasek was founded in 1974 and has a triple A rating. It holds stakes in companies such as Standard Chartered, ICICI Bank and prominent Singaporean companies such as Singapore Airlines. Predictably, its investments are mainly in Singapore and East Asia. It aims to have 10% of its portfolio in Latin America and sub-Saharan Africa (at the end of the past financial year, it had no portfolio exposure to sub-Saharan Africa). The main shareholder of Temasek is the Singapore government, yet its stated strategy is to not interfere in the operations of portfolio companies. Thus it is meant to act as a custodian of the country’s economic interests, without compromising the commercial disciplines that make for successful companies. Its current assets sit at USD133bn and it has made a total shareholder return of 16% per annum since inception. Not bad, though journalists argue that this is unverified. This is an important lesson for us during this corporate governance crisis we are witnessing with our state-owned enterprises.

It is often said that Rwanda is trying to become the Singapore of Africa. One can imagine that narrative of a ‘small country with determined leadership overcoming resource constraints’ playing itself out in Rwanda. It should be careful. Many countries have fallen into the pitfall of thinking that they are following the Singapore model, or the developmental state, whilst they are in fact ignoring crucial facets of that model. I have gotten tired of the faddishness of most thinking in international development. What I draw from the Easr Asian experience, is the importance of pragmatic leadership.