IS IT time, asks Gordon Orr, a director of the heavyweight management consultancy firm McKinsey, to let the Brics sink? When the Bric acronym (Brazil, Russia, India and China) was first applied 20 years ago, they contributed 20% of global economic growth. China was already the heavyweight of the group, but it didn’t then dominate to the extent it does now. In 2004, it contributed 13% of global gross domestic product (GDP) growth, with Brazil, Russia and India combined contributing 9%.
But in 2012 China contributed 26% of world GDP growth and 29% last year. Between them, Brazil, Russia and India’s collective share added up to 7%. South Africa, which was controversially added to the group later, doesn’t add an iota.
China is South Africa’s second-biggest trading partner. No other country gets close, though the European Union as a bloc remains our biggest trading partner. It follows, therefore, that what happens in China is important to us. Orr says China’s labour costs continue to rise by more than 10% a year, its excessive land costs are pricing offices out of city centres, energy and water costs are rising so rapidly that they may be rationed in some regions and, most important of all, the cost of capital is higher, especially for state-owned enterprises.
All this arises from the perceived need to "rebalance" the Chinese economy to reduce the overwhelming importance of its infrastructural stampede and increase the role of domestic consumers. George Soros, not my favourite but no mug, told the Observer a fortnight ago he thought China’s rapid growth was running out of steam.
Stock markets, usually the first to detect changes of such a fundamental nature, are marking down stocks that depend on the Chinese appetite, such as Rio Tinto and Anglo American, whose vast sales of coal and iron ore have been directed almost exclusively at China.
And Chinese consumers are wising up. The Wall Street Journal’s Wei Gu says demand for luxury goods will slow this year. Bain & Company expects an increase of just 2.5% to about $21bn. Brands like Gucci and Louis Vuitton are overexposed and it’s hurting them — Gucci’s third-quarter sales in China fell. Rolls-Royce enjoyed an 11% rise in its China sales last year, though it is muted about its prospects for the current year.
...
HEALTH Minister Aaron Motsoaledi has been pursuing his goal of interfering in our personal lives to good effect. Along with the rest of the world, he has succeeded in ensuring that cigarette packets carry bloodcurdling warnings and tobacco advertising is comprehensively banned.
By the end of the year, advertising and advisory services relating to products intended for babies (foods, milk substitutes, feeding bottles, teats etc) will be banned. It’s all part of his "boobs are best" campaign (breast-feeding infants as opposed to bottle feeding).
And he is only a step away from securing a ban on alcohol advertising. Who will then cough up the vast sums necessary for sports sponsorship or pay for the country’s rather good sports viewing on television, he is leaving to God.
So I wish he would do his job instead. Doctors at Baragwanath Hospital serving their internships carry small bags which they keep close. The bags contain precious but normal stock-in-trade items — sutures, syringes, ampoules of various essential drugs and so on.
They carry them because when word spreads that "Supplies are in", they rush to fill their bags. They need to get to the stores before the nursing staff. Failure means the nurses grab the lot, and they are apparently next seen not in the hospital but being sold on the streets.
And this is what’s happening under the nose of the man who has dedicated himself to introducing a National Health Insurance system. We shouldn’t grumble too much, I suppose. At least he doesn’t advance lemon, beetroot and garlic as treatments for HIV/AIDS.
But the DA, which is sometimes as stupid as the governing party, thinks Motsoaledi has done a good job. What was it smoking when it came to that conclusion?
...
Moody’s states the obvious
CREDIT rating agency Moody’s has got quite a nerve. Now it is telling us that decentralised wage negotiations in the platinum sector could lead to the unions — read the Association of Mineworkers and Construction Union — playing the mining companies off against one another.
As though the men running those companies don’t know that. In any event, decentralised bargaining is exactly what some of us have been agitating in favour of for some years. Centralised bargaining is unconstitutional per se because it permits a select few to impose their wishes on everyone else without bothering to ask them.
Moody’s should restrict its observations to its areas of knowledge, such as these are — some of us aren’t about to forget the collective abdication of their responsibilities in the build-up to the 2007-08 world financial crisis.
But it is certainly true that South Africa either is or is fast becoming the strike capital of the world. Unions are calling out members for any imagined slight. We even have members of the national football team contemplating strike action for bonuses they think they deserve for playing fourth-league-quality soccer in the current CAF African Nations Championship competition, from which they were rudely expelled.
Barely a day passes without some union or its members downing tools and treating us to another boring spectacle of toyi-toying. And now, for the umpteenth time, some postal workers are tired and have withdrawn their labour.
Meanwhile, the currency, which was R3.60 to the dollar when democracy arrived in April 1994, is now a smoking ruin. An old mantra, long discarded, was that a prime responsibility of any government was to defend the currency. By that standard this government should long since have been shown the door.
Perhaps we need to start debating the advantages and disadvantages of jettisoning the rand and adopting the ubiquitous greenback. Whatever else it would do, it would immediately enable everyone to see the deleterious effects of our apparently unstoppable march to communist perdition.
IN TOWN: A man walks past a floral display in Durban announcing the fifth annual Brics Summit. Picture: REUTERS
IS IT time, asks Gordon Orr, a director of the heavyweight management consultancy firm McKinsey, to let the Brics sink? When the Bric acronym (Brazil, Russia, India and China) was first applied 20 years ago, they contributed 20% of global economic growth. China was already the heavyweight of the group, but it didn’t then dominate to the extent it does now. In 2004, it contributed 13% of global gross domestic product (GDP) growth, with Brazil, Russia and India combined contributing 9%.
But in 2012 China contributed 26% of world GDP growth and 29% last year. Between them, Brazil, Russia and India’s collective share added up to 7%. South Africa, which was controversially added to the group later, doesn’t add an iota.
China is South Africa’s second-biggest trading partner. No other country gets close, though the European Union as a bloc remains our biggest trading partner. It follows, therefore, that what happens in China is important to us. Orr says China’s labour costs continue to rise by more than 10% a year, its excessive land costs are pricing offices out of city centres, energy and water costs are rising so rapidly that they may be rationed in some regions and, most important of all, the cost of capital is higher, especially for state-owned enterprises.
All this arises from the perceived need to "rebalance" the Chinese economy to reduce the overwhelming importance of its infrastructural stampede and increase the role of domestic consumers. George Soros, not my favourite but no mug, told the Observer a fortnight ago he thought China’s rapid growth was running out of steam.
Stock markets, usually the first to detect changes of such a fundamental nature, are marking down stocks that depend on the Chinese appetite, such as Rio Tinto and Anglo American, whose vast sales of coal and iron ore have been directed almost exclusively at China.
And Chinese consumers are wising up. The Wall Street Journal’s Wei Gu says demand for luxury goods will slow this year. Bain & Company expects an increase of just 2.5% to about $21bn. Brands like Gucci and Louis Vuitton are overexposed and it’s hurting them — Gucci’s third-quarter sales in China fell. Rolls-Royce enjoyed an 11% rise in its China sales last year, though it is muted about its prospects for the current year.
...
HEALTH Minister Aaron Motsoaledi has been pursuing his goal of interfering in our personal lives to good effect. Along with the rest of the world, he has succeeded in ensuring that cigarette packets carry bloodcurdling warnings and tobacco advertising is comprehensively banned.
By the end of the year, advertising and advisory services relating to products intended for babies (foods, milk substitutes, feeding bottles, teats etc) will be banned. It’s all part of his "boobs are best" campaign (breast-feeding infants as opposed to bottle feeding).
And he is only a step away from securing a ban on alcohol advertising. Who will then cough up the vast sums necessary for sports sponsorship or pay for the country’s rather good sports viewing on television, he is leaving to God.
So I wish he would do his job instead. Doctors at Baragwanath Hospital serving their internships carry small bags which they keep close. The bags contain precious but normal stock-in-trade items — sutures, syringes, ampoules of various essential drugs and so on.
They carry them because when word spreads that "Supplies are in", they rush to fill their bags. They need to get to the stores before the nursing staff. Failure means the nurses grab the lot, and they are apparently next seen not in the hospital but being sold on the streets.
And this is what’s happening under the nose of the man who has dedicated himself to introducing a National Health Insurance system. We shouldn’t grumble too much, I suppose. At least he doesn’t advance lemon, beetroot and garlic as treatments for HIV/AIDS.
But the DA, which is sometimes as stupid as the governing party, thinks Motsoaledi has done a good job. What was it smoking when it came to that conclusion?
...
Moody’s states the obvious
CREDIT rating agency Moody’s has got quite a nerve. Now it is telling us that decentralised wage negotiations in the platinum sector could lead to the unions — read the Association of Mineworkers and Construction Union — playing the mining companies off against one another.
As though the men running those companies don’t know that. In any event, decentralised bargaining is exactly what some of us have been agitating in favour of for some years. Centralised bargaining is unconstitutional per se because it permits a select few to impose their wishes on everyone else without bothering to ask them.
Moody’s should restrict its observations to its areas of knowledge, such as these are — some of us aren’t about to forget the collective abdication of their responsibilities in the build-up to the 2007-08 world financial crisis.
But it is certainly true that South Africa either is or is fast becoming the strike capital of the world. Unions are calling out members for any imagined slight. We even have members of the national football team contemplating strike action for bonuses they think they deserve for playing fourth-league-quality soccer in the current CAF African Nations Championship competition, from which they were rudely expelled.
Barely a day passes without some union or its members downing tools and treating us to another boring spectacle of toyi-toying. And now, for the umpteenth time, some postal workers are tired and have withdrawn their labour.
Meanwhile, the currency, which was R3.60 to the dollar when democracy arrived in April 1994, is now a smoking ruin. An old mantra, long discarded, was that a prime responsibility of any government was to defend the currency. By that standard this government should long since have been shown the door.
Perhaps we need to start debating the advantages and disadvantages of jettisoning the rand and adopting the ubiquitous greenback. Whatever else it would do, it would immediately enable everyone to see the deleterious effects of our apparently unstoppable march to communist perdition.
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