|As we've seen
so many times before, our direct neighbour has a definite influence on
South African economics. Once again the little ground the Rand gained,
it lost again. Like a yo-yo running out of spin, we're definitely at the
bottom. Still a bit of string left, and that's what's worrying. How much
lower can we go?
Obviously there are a couple of other factors to consider here. The massive slide of the Rand over December is still a mystery to most. A special investigative unit appointed by government to look into the causes of the considerable devaluation of our currency over December helped a bit. Even though this is costing the taxpayer a massive 25 million bucks, with no conclusive result in site. I suppose it's a job that pays well for the participants. The consequences of the undervalued Rand has seen consumer price index (CPI) go wild. This in turn pushed up inflation. OPEC countries putting a squeeze on oil production is of course not helping at all.
And now that most suppliers have run out of "old" stock, the prices are going up, so is fuel and the interest rate. This is a never ending saga of a struggling third world economy. Saambou, the only primarily white owned / managed bank has been under curatorship for some time now. That after theReserve Bank decided not to "bail it out". A fairly small probelm prompted Saambou to apply to the Reserve Bank for assistance (as far as the banks liqidity went), the Reserve Bank turned it down. This document was leaked to the public and a "withdrawal" frenzie started. Over one weekend clients withdrew over a billion Rand from their accounts. The result was curatorship. The three major banks excluding Absa, is showing some interest in taking over the Saambou customer accounts. We'll now on the 20th of this month what's going to happen to Saambou. In the meantime, it's up to Nedcor, Standard and BOE. BOE themselves got bailed out by the Reserve Bank this past week. Do you smell a rat here somewhere? A primarily white organisation with primarily white customers being "forced" out of business? Dunno, but why try and justify rescueing one and not the other?
Mbeki's stand on the Zimbabwe elections was a curious one. His deputy, the "honourable" Jacob Zuma, declared the elections free and fair. Mbeki however reserved his viewpoint and possible embarresment. South African officials sent to Zimbabwe to oversee the elections in that country continuously pronounced it free and fair. This in spite of numerous cases of intimidation, violence and even killings. With Mugabes' government slowing down the voting process, not supplying sufficient polling stations and using the police and army for further intimidation, the South African delegation had a holiday, lazing around in pubs with the occasional bit of travelling to some of the polling stations. They went with a mandate. This mandate clearly stated that they are there to support Zanu-PF fullstop. In spite of all the news coverage to the contrary we've seen on local television, the election was declared "free and fair".
What else would you expect from the "experts", one Mbeki and Zuma. Zuma was the first to applaud Mugabe for his radical land-reform methods. And Mbeki, well we all know how clever he's become on the HIV/AIDS issue. So clever in fact that most government hospitals are now providing anti-retroviral drugs to thier patients without government consent. God knows what will happen if Zuma was president! God knows what would have happened in this country if hospital officials didn't stand up and defied governments' laws on Aids drugs! But I'm sure as hell starting to feel the pinch on the Zimbabwe screw-up, the arms deal and the corruption on official level!
Farmers are being put out of business for the sole purpose of land redistribution. Four years ago we had more than twenty four thousand dairy farmers. Today only four thousand remain. Estimations are that by mid year a liter of milk will cost the consumer close on five rand. The lifeline Trevor Manuel threw us, the taxpaying citizen with his budget speech a couple of weeks ago, will now go to additional waterpumps to keep a barely floating ship afloat. Various reasons are given for the increase in the interest rates, and I suppose the people in the know, know what they're talking about. Economic growth will slow down, which means less money for government. In the short term this will definitely hurt our economy and our people though according the the "professionals" it is important for long term growth. We'll have to wait and see. Hopefully we can survive long enough to see the result.
Trevor of course had to hit alcohol and tobacco with his so-called "sin" taxes. And the anti-tobacco lobbyist can't stop with facts and figures regarding the health of the nation if people had to stop smoking. It was estimated that if every smoker smoked one cigarette less a day, four and a half thousand people would be without a job. The laws banning cigarette advertising have already made a big impact on our unemployement figures. A packet of twenty cigarettes will cost you an average of eleven rand fifty with locally produced (SAB) Castle beer setting you back over twenty bucks a six-pack! I won't even venture into "hard-tack" land.
And if Mbeki stands with Zuma on the Zimbabwe issue? Who knows. Sanctions should be implemented as a matter of urgency against Zanu-PF members. As long as America keeps their stinking fingers out of Africa I am sure Europe and the UK can put enough pressure on Mugabe and his "war veterans" to normalise the situation. It is sad though that so many lost so much for so little. And it's not over yet!