Reasons For My Recent Absence

 

Unlike many of my small yet faithful readership, I have been absent for several weeks from these pages. My thanks go out to those persistent readers who flatter me greatly by their repeated visits to my site in spite of my recent silence. I just hope that you will all forgive my lapse and continue your visits.

 

Perhaps some had thought that I had been the target of crime, with a dash of xenophobia thrown in for good measure. No, nothing quite so dramatic, thankfully.

 

I have been absent for rather more prosaic – and, it must be said, selfish – reasons.

 

Firstly, I have to confess that I find writing to be extremely hard work – and which is probably self-evident from the quality of what I have produced thus far. I have always been mildly word- and number-blind at the best of times and this can be disadvantageous when one’s brain races faster than the ability to write or type out thoughts into an acceptable format. It can take me several days to produce one of my little contributions.

 

And despite sharing the fault of many writers – namely, that of having the arrogance in assuming that what one wishes to express is worthy of the time and attention of one’s hoped-for readers - I tend to avoid until the last possible minute actually creating the masterful missive, waiting until the urge to present my particular and peculiar ideas can be restrained no longer.

 

A driven firebrand clearly I am not…

 

Secondly, my office is fiery hot in summer and numbingly cold during winter. Owing to the fact that our beloved telecommunications monopoly, Telkom, no longer wishes to provide fixed-line telephone/fax/Internet services to my suburb (just 40 km from the centre of Johannesburg), I have had to resort to the incredibly more expensive and temperamental wireless services offered by a local cell phone network – whose signals are unavailable within the body of my house. Consequently, I have had to move my office into a partially completed and totally uninsulated outbuilding some distance from the house where, on good days, I can receive a signal just barely adequate to conduct my modest business and creative activities.

 

Today, with an outside temperature of around 19 degree Celsius and 8 degrees Celsius inside my spacious storeroom/barn, it is not too bad. Yet my fingers are still stiff with cold, my feet no longer part of my body and my arms and torso almost immobile because of the layers of clothing encasing my shivering frame.

 

Thirdly, since my last post last month I had the chance to earn a couple of bucks, so had to take a few days chasing some consultancy work – regular full-time and permanent work is hard to come by for a white man in his fifties in South Africa these days. As mentioned in a previous post, I like to eat on occasion.

 

Fourthly, I have been severely distracted by some immediate family concerns.

 

The first of these has been the impending permanent departure from South Africa of my daughter and her little family. At last, she has had enough of the crime, the corruption, the utter indifference to levels of professional service delivery and the inability for a person of her considerable energies and skills to progress in life merely because of her European ancestry.

 

This truly is a tragedy for South Africa. Even allowing for the fact that she is my daughter and my resultant natural bias, I have come across few people who have demonstrated anything like the grit, doggedness and sheer natural ability of this young woman. Having divorced her pathetic and selfish excuse of a husband (and whom I shall be making a point of seeking out one of these fine days), penniless and with a small daughter of her own in tow, she has exhibited a strength of character that saw her not only raise her child into someone I am proud of but also drove her to carve out a life and career to the maximum possible under the circumstances of present-day South Africa.

 

Her new life will be no easier to begin with. She will, however, be allowed to take her career to whatever level she desires; the only obstacles she will face in her new home will be those imposed by her ambitions and her talents.

 

I shall greatly miss her and my first granddaughter.

 

The second family concern that has been occupying my attention in recent weeks relates to my second granddaughter.

 

Born three months premature last month, this little pink angel has been fighting for her life since being so rudely thrust out into the world. Fractionally larger than my outstretched hand when I first saw her the day after her delivery, she has repeatedly faced the spectre of death – including surgery on a heart little larger than my thumbnail (and, in the process, reducing the surgeon and his team to tears as they worked their incredible skills on that tiny body).

 

Expecting, at any moment, to hear the worst, this little girl has fought back time and time again. We all thought that the end had come early this week when, hours after the heart surgery, she crashed catastrophically. One of the nursing staff, bless her, even hung around in the waiting room for several hours that same night - after the end of her twelve-hour shift - just to be there.

 

After counseling my son and his wife, the decision was reached by the doctors to take the baby off the ventilator. The family gathered to say their farewells to her and to await the arrival of the doctor who would be switching the machines off.

 

The machines are still running. Incredibly, joyously, just one hour before the due time, my little granddaughter, whom I had angrily accepted that I would never know, rallied and, for the time being at least, re-stormed the ramparts of life yet again.

 

Even those most cynical of creatures, the doctors and nurses, described the recovery as ‘miraculous’.

 

Who knows what the next hours, days, weeks and months will bring. Perhaps all of the terrors and fears of the last few weeks will be for naught. I feel most, of course, for my son and daughter-in-law. My desperate hopefulness can be as nothing compared to theirs. The little that my wife and self have been able to do has been confined largely to babysitting our three-year old grandson and trying to distract him away from his bewilderment and anxiety at all the upset within his family at present.

 

To those who gave thought and prayer to the newest member of our family in her predicament I offer my thanks – even though I have never met or known most of you. To the doctors and nurses at the Medi-Clinic where this little drama is being played out, I offer my thanks for your skill and concern.

 

To my new granddaughter – be with God and give it all you have.

 

Spearpoint.

12th June 2008

 

 

 

 

 

 

 

More on Food and Fuel Prices…

 

 

 

 

 

 

A thought occurs…

 

Eskom, as we are all probably aware by now, seems to be hell-bent on hiking their tariffs to the ordinary South African electricity consumer by 53% this year and by a similar amount next year.

 

I now wonder if, just maybe, we poor and long-suffering victims of the South African corporate and political robber barons might reasonably expect a small glimmer of light at the end of this seemingly endless tunnel of despair in which we find ourselves.

 

In the vein of any good communist or socialist government, it was recently announced by our inefficacious Minister of Health that certain (unspecified) interventionist steps were being considered on the present crisis over rocketing food prices.

 

Just to digress for a moment – why such an announcement should be made by the Minister of Health rather than the Minister for Trade and Industry or the Minister of Finance I find to be confusing. Whilst I am sure that there are public health concerns to be considered if the very poor cannot afford to buy their staple foods, I do feel that any interventions – even in the form of food stamps – would be better managed as part of an overall economic and financial strategy led by the Department of Finance and whose Minister has shown some reasonable degree of competence over the past few years.

 

Anyway, to get back to the point I wish to make…

 

Now, if the South African government is demonstrating a willingness to change its stance and to interfere with normal market forces on food prices then surely, in order to be consistent, it should also consider a similar intervention on fuel and electricity prices.

 

There are several ways in which considerable assistance could be offered to the consumer without necessarily distorting the market and its operations.

 

For example:

1.       VAT could be reduced or removed for all foods, fuels and power supplies;

2.       Eskom could be required to either cease the supply of one third of our total production of electricity for export at the ridiculous price of eleven cents per kilowatt or to export it at prices which would give a far better return, thereby obviating the need to impose punitive tariff hikes on South African domestic consumers;

3.       The fuel industry could be de-regulated so that competition could be allowed on the forecourt and so that supplies of oil could be sourced in a manner that would free South Africans from the artificial and arbitrary pegging of spot prices to the Singapore market;

4.       Introduce new trading rules to control and penalize the exorbitant profiteering in the various commodity (particularly foodstuffs and fuel) markets that results from the unfettered and unnecessary trading, re-trading and re-re-trading of essential goods and commodities.

5.       As previously advocated by Spearpoint, the government could also abolish all direct and indirect taxes (e.g. income, provisional, dividend, corporate, payroll, VAT, fuel levies, compensation, UIF, provincial, municipal, etc. etc. etc. etc….) and replace them with a single, simple “consumer” tax on all goods and services (excepting food, fuel and electricity) in various bands. Thus, incomes would be maximized and protected and the tax burden for individuals and companies would be defined by how much they spent within all sectors of the economy. The tax could be designed and collected on much the same basis as VAT, thereby saving vast amounts in collection costs and public service staffing costs.

 

I am sure that there are other ways in which commerce could be stimulated whilst making the sharing of the tax onus across the entire population far fairer than it is at present. It just requires a little imagination on the part of the government.

 

Most importantly, however, the government, through its own initiative on food prices, has now opened the door to the possibility of constructive intervention in other, critical, sectors of the market economy.

 

Now they must get on with it…

 

 

Spearpoint.

13 May 2008

 

 

 

 

Eskom - Such Great Guys….pfft!

 

 

 

 

Why am I not too terribly surprised that the mismanagers of our electricity utility, Eskom, have done it again?

 

It’s a wonder that these guardians of our national electrical infrastructure don’t have tails wagging from their foreheads and noses on their behinds. Yet again yesterday they demonstrated, to mix the metaphor slightly, that they can’t tell their elbows from their fundaments.

 

After the unprecedented introduction of unnecessary, random and widespread power cuts (‘load shedding’) throughout South Africa late last year, these mismanagers then proceeded inexplicably to relax those early this year – quickly followed by a programme of what they variously called ‘pre-emptive’ or ‘predictive’ scheduled periods of blackouts based on a two-week cycle.

 

So we all begin to think to ourselves “Great! At long last these guys have finally begun to show a little competence and professionalism by getting their act together and allowing us all to be able to plan our lives around a fixed timetable of power cuts”. Still a bad situation, but one now that appeared to be showing signs of being managed.

 

Then, last week Eskom announced that, owing to the fact that South Africa was to chaotically cram three public holidays into a single week (between 28^th April and 2^nd May), load shedding was to be suspended for that week because the bulk of energy-hungry industry would be closed and its personnel enjoying itself either on the coast, in the bush somewhere or cowering at home trying desperately not to spend the money they will be needing in the near future to meet the increasing costs of food, petrol and their mortgages.

 

This time we all think “Great! A bit of relief from having to juggle our lives to Eskom’s tune”.

 

Now, to cap it all, yesterday Eskom announced that, with effect from 4^th May (next Monday) they would suspend all future scheduled load shedding because they were confident that the bulk of what they claimed to be necessary in terms of saving electricity could now be achieved without imposing blackouts on the country.

 

Now I’m not one (normally) to look a gift horse in the mouth – even an equine of such doubtful pedigree and value as this. But the constant about-facing of Eskom over the past few months really takes the biscuit and reinforces my personal belief and assertion that every one of the board and senior managers of Eskom should be removed from their posts and put in a place of safety – ours, not theirs.

 

(Those of you wishing to have a look at my previous posts on this particular matter of the spleen can find them by back-tracking on this site. I’m sorry, but I haven’t yet figured out how to insert those sexy little links into my posts. Maybe I won’t anyway – I want to encourage as many people as possible to actually read the other posts on other subjects that I have, so far, managed to wrench from my keyboard. See – an ulterior motive for ignorance and indolence.)

 

So…what began as a crisis, with recriminations and screams of outrage flying in every direction, then eased, then escalated into punitive scheduled blackouts and now appears to have relaxed so much that one is tempted to assert that there never was a crisis in the first place.

 

Shortly after the ‘crisis’ began it became known that Eskom was exporting one full third of its total production to neighbouring countries. It has now been stated that those exports were sold at prices significantly below the cost of production.

 

In other words, the South African consumer of electricity was subsidising – to a considerable degree – the governments importing South African electricity. (I can’t believe for one moment that the end users in those countries benefited from that subsidisation).

 

Excellent economics, Eskom. What’s the betting you got some nice fat bonuses for that little sleight of hand? And, no doubt, some kudos (or, perhaps, something rather more substantial) for the ANC politicians from their buddies around the continent…

 

Oh, and by the way, we South Africans contributed directly to the repression of the population of Zimbabwe by Robert Mugabe and his henchmen.

 

Gee, thanks. That’s really going to help me get to sleep at night.

 

On top of all that, we now learn that the serious consumers of electricity in South Africa – the mines, heavy industry and business in general – have been paying tariffs some 275% lower than the domestic consumer.

 

Bulk discounts (not normally a feature of the South African business mentality) I can understand. But 275% less is not a discount – it’s an outright gift. Subsidised by the domestic consumer – again.

 

There is no way that the vast majority of the electricity produced in this country (and consumed by industry) is sold at a loss. The stated profits of Eskom cannot possibly come solely from the domestic consumer.

 

So the domestic tariff, less 275%, as charged to industry, is hugely profitable to Eskom.

 

But sauce for the goose should also be sauce for the gander. Why is the domestic consumer not charged tariffs which are very much closer to the industrial rates (or vice versa, if the lies of Eskom were to be made more consistent)?

 

Why is Eskom fighting tooth and nail for a 100% increase in tariffs over the next twelve months? For the domestic user of electricity that is a killer of a hike in rates, but for industry it will be verging on the insignificant.

 

If Eskom needs funds to expand its generating and transmission capabilities (now doubtful, given the revelations about how much electricity is exported across our borders at charity prices), then why do the mismanagers of Eskom seek to extract the cost of their own screw-ups from their captive South African domestic consumers?

 

What is wrong with requiring higher charges for both the foreign customers and local industry? Why, in the name of all that is accepted as good practice in economics and business protocol in general, should we in South Africa subsidise the inefficiencies and malpractices elsewhere on our continent? Why should South Africa beggar itself for the rest of Africa?

 

And why does Eskom have only a one-dimensional approach to the problem – namely raising capital through tariffs?

 

There are other ways, such as, for example, raising a bond issue or creating and selling additional shares in its business. At least then those who can afford to subscribe to the capital expansion of Eskom could do so and those who can ill-afford mercilessly higher tariffs could continue to use electricity without having to sell their mothers-in-law and children into slavery.

 

It is clear that neither Eskom management nor the ANC government has the skill or the imagination to run and operate our precious electrical generation and transmission utility.

 

And because Eskom is a strategic national asset it should not be privatised, either. We neither want nor need the dubious benefits of parity pricing and gross profiteering that would, inevitably, result from such a move. Witness other countries around the world which have trodden that particular route. Power and water are public service utilities designed for public benefit and have no role within the commercial sector; they are too fundamental to the well-being of our nation and its people to be exposed to the rapine of the highest bidding speculator.

 

Rather operate the public utilities much as the State Electricity Commission was run in Victoria, Australia back in the 1960’s and 1970’s. A public utility, set up as a government commission charged with operating as a business - but without profit being the underlying raison d’etre.

 

We are being served by maleficent incompetents who have lied to us, failed in their due diligence and are, generally speaking, a pathetically sorry bunch of unimaginative time servers anxious more for their own benefices that those they are charged to protect and enable.

 

Please go away – all of you. Find something else – preferably in another place - that you can pervert and destroy.

 

Allow us to find those who are operationally able to run Eskom without destroying it, under the guidance of commercially competent managers who can foresee and prevent losses within a non-profit organisation.

 

Spearpoint.

1^st May 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rampant Food and Fuel Prices.

 

 

 

The hiatus in this blog of the last couple of weeks resulted from me traveling a bit through southern Africa on business.

 

You should understand that, being a white South African male over the age of fifty, affirmative action and all the “-isms” of age, gender and race render me all but unemployable in this Rainbow Nation of critical skills shortages – notwithstanding my degrees and international experience in my field. So when work does periodically present itself I am compelled to grab it and to fiercely focus on the tasks that promise, for the time being, to maintain the temporal connection of body and soul. When money beckons I must then temporarily forego some of my other - more pleasurable and satisfying – pursuits such as blogging. And, much as I enjoy writing, it pays no bills and I have this expensive addiction to breathing which must be periodically slaked with cash – preferably lots of it – whenever possible. Hence my recent absence.

 

I am not so enamoured of driving as once used to be the case; my politically-incorrect car is an ageing brute that punishes its driver for forcing a few thousand extra kilometres out of its creaking carcass. But, in addition to providing a solid upper-body workout, such driving allows time to reflect on Life, the Universe and Everything and thereby provides some of the material which old Spearpoint then tries to convert into the approximations of pearls of wisdom that he seeks to muster in these posts.

 

During this journey I found myself mostly pondering on all the recent shocks of the astronomical price increases in food, fuel and other commodities around the world.

 

We’re all familiar with the price increases. Petrol and diesel prices threatening to push us back to the horse-and-buggy age; staple food escalations promising the prospect of global population decimation; real estate prices destined to shunt us all back into grass huts in a feudal economy; other commodities increasing to the point where the little baubles and the technologies which brighten up and buttress our otherwise drab lives are beyond reach; the threat of drastically higher electricity charges which promise a return not to the age of hurricane lanterns and candles – we won’t be able to afford to buy the oil – but to the age of rush lights and goose grease; the list goes on.

 

Trying to figure out why all of these events have come about in such an apparently short space of time has been an interesting exercise and has led me to some conclusions that are distinctly challenging.

 

We might as well face it: for a considerable period we have had it relatively easy. Ignoring, (for the sake of the point being made), the half or more of the world’s population that has always been too poor to afford to worry about the fibre in its diet (instead being more troubled with the grit, stones, twigs and other detritus in such food as may be available), the world has enjoyed a relatively benign time of late where the basics of life, plus a few luxuries, could be had whilst still having the prospect of putting some money aside for the odd rainy day or two.

 

Then, of course, (being human) we then proceeded to hurry, helter-skelter, to bugger up the nice little zone of comfort within which we found ourselves.

 

Finding the products of our technologies to be pleasant and convenient we then got greedy. We wanted more and, in that wanting, gave space to other greedy people who, for a price, were willing to provide us with more.

 

Let’s look at some of what we wanted in terms of food and fuels since these are the most immediate of our daily needs and desires.

 

• Better quality food – less grit, for a start – with brighter colours and more varied flavourings, artificial or not, which would enable us to differentiate our “lifestyle” from those less well off than ourselves (including our silly kid sister who was dumb enough to marry that throwback who digs ditches for a living).
• Greater quantities of food so that we could gorge ourselves three or four times a day rather than eating small amounts continually through the day as our bodies were designed to do when we were evolving as hunter/gatherers – thereby fostering the growth of global industries in slimming products and remedial medical healthcare.
• Faster food so that the tedious nature of the preparation and processing of cooked foods could be lessened.
• Ever greater supplies of power in the form of electricity because we didn’t want to wear lots of clothes around the house or work and also because the old wood-fired kitchen range was too dirty and too much hard work to clean every day.
• Even greater supplies of fossil fuels because we needed to power the electricity plants and to propel larger, faster vehicles of personal transportation which could give us a shirtsleeve environment in which to wait out the traffic jams on the way to and from work and the supermarket.

 

Lots of wants.

 

My point here is that we have ourselves to blame for many of the reasons behind high prices. Someone has to be paid to produce, package, store and deliver the objects of our desire. Our desires also open us to exploitation by those who would wish to manipulate and escalate those same desires in order to provide more so-called “choices” as a means of generating further sales and revenues by way of marketing and advertising.

 

But there are other ways in which we are subjected to ever increasing pricing which, when all is said and done, we have little control over.

 

Now, before I proceed any further, I need to stress a couple of things.

 

Firstly, I am not too different from the bulk of Western society in that I enjoy the products and services that have been created and made available to everyone who can afford them. I have even managed to be able to buy some of them. I also feel the occasional twinge of lust for the latest mobile phone or big hairy 4×4 – although one of the very few benefits of advancing age is the ability to exert some measure of control over those twinges and to refrain from impulsively either reaching into my hip pocket or signing some usurious agreement to hire the object of desire for a period way beyond the object’s value and practicality.

 

Secondly, within certain limits of taste and capability, I am just as capitalistic as the next man. I like to turn a profit - and the more the better. Admittedly, I am a small-time capitalist, never quite having managed to beat my conscience into the required degree of insensibility to be able to view my fellow humans merely as targets for plunder. I guess I must be a failure – although I do manage to get by. My sleepless nights are caused more by worrying about how I shall survive, sans pension etc., (don’t ask – it’s a long story, as the cricket said to the ant), rather than subconsciously stressing over the deep patina of tarnish building up on my soul.

 

My problem is not so much with the de-skilling of the past couple of hundred years or so - an inevitable consequence of the need to develop an increasingly complex society necessary to cater for the rank stupidity of humankind as it remorselessly breeds itself into global Ebola-like parasitical extinction.

 

My problem with the current situation regarding price increases in the very basic needs of life rests more with the fact that most of these increases are totally artificial and are motivated by the plain outright grasping greed of a relatively small number of individuals wishing to enrich themselves even more than they already are by further impoverishing the already poor and vulnerable.

 

There are a number of parties to this concerted “conspiracy” (don’t you just hate that word?):

1. Governments seeking to ensure their national interests;
2. Commodity and stock exchanges and their associated traders, speculators and brokers;
3. The large wholesale, retail and distributive chains (increasingly often integrated under single ownership);
4. Consumers – as both participants and victims.

 

Each of the above parties is motivated solely by greed and self-interest at the expense of others. Each is able to operate and gain by virtue of the fact that, whether we like it or not, the world is based upon the capitalistic models and theories developed and honed over the last few hundred years or so. Even former and current communist/socialist governments and ideologies have found themselves forced to modify their pretty theories in order to survive – in the case of mainland China to positively thrive – in the harsh world of capitalistic trade and business. Everybody wants to turn a buck.

 

However, capitalism – as with every other economic theory, I guess – contains within its corpus some fundamental flaws which, long-term, will probably render the entire edifice unworkable without some speedy rectification.

 

The main long-term problems with capitalism are, as I see it, the concepts of firstly, eternal economic growth and, secondly, charging prices based on what the market will bear at any given time.

 

These two fundamental underpinning ideas are, ultimately, unsustainable and will create the conditions under which capitalism will, sooner or later, fail unless modified.

• Untrammelled economic growth can only cause an eventual saturation of the marketplace – even allowing for provisions such as the inbuilt obsolescence of products and services (which, already, is a major feature of modern production and economic methodologies) and the enrichment of the entire population of the planet in order to provide sufficient markets for greater and greater production outputs (and which we are most certainly not seeing at present). There seems to be no inherent concept of reaching for and attaining a sustainable equilibrium.
• The idea of charging the very most that the end user of the products and services produced can afford can only result in the near- and long-term widening of the divide between the rich and the poor. Those at the lower end of the economic scale have little or no opportunity to accumulate anything from their labours since so much, if not all, of their incomes are utilised in acquiring just the basics of life – simple foods, rude shelter and public transport. Thus, the poor remain poor and, as such, are of little benefit to capitalism other than as a pool of cheap labour. Their poverty prevents their empowerment as producers and consumers of products and services and their value to the capitalist model is minimal. Even raising their wages accomplishes nothing due to the impact upon production costs and subsequent price rises.

 

Having said all that, let us now return to the “conspirators” in the current tidal wave of price hikes in fuel and energy.

 

The prime example of a government serving its own self-interests in recent times has been that of the United States creating (much as Nazi Germany did in the 1930’s) the conditions to explain and excuse their invasion of Iraq five years ago. In so doing they began the entire process of market uncertainty and price escalations in which we find ourselves today. Oil prices commenced their upward march towards the top of a hill of which no-one outside of the oil industry knows the height. In starting and maintaining an unwarranted war (“We’re prepared to fight for 100 years!”) the inevitable consequence was to shake the global oil market into pessimism and the resultant supply fears – even though, notwithstanding the predictions of the 1960’s and 70’s, there is, in fact, no shortage of oil in the world. Indeed, hardly a month goes by without some announcement of a major oil discovery somewhere on the planet.

 

The only real beneficiaries of the Iraq war have been the oil companies. Oh, yes – and the current oil industry-dominated US political administration.

 

Gee, what a coincidence.

 

De-stabilising the global oil market then gave others the chance to cash-in on the uncertainty.

 

Commodity exchanges, brokers and traders could then “legitimately” demand ever higher prices for the black gold on the pretext of supply uncertainties and the claimed natural balance between supply and demand based upon the old market maxim of charging whatever the market could bear.

 

This, of course, totally ignored the fact that, despite the best efforts of the OPEC oil cartel, oil supply then and now has never been under anything remotely approaching threat. Nor were oil production costs on the increase.

 

Traders and speculators were, in effect, given license to artificially generate and exacerbate a supposed crisis in oil for the sole purpose of increasing their turnovers, margins and personal commissions under the guise of serving the best interests of their stockholders.

 

Consider this:

• Several days ago a US Navy warship fired a few warning shots across the bows of a couple of (supposedly) Iranian speedboats.
• Immediately upon that news the price of a barrel of oil rocketed by $3!

 

Where was the threat to world oil supplies that merited a 2% increase in the oil price in the space of a couple of hours?

 

There was, of course, no justification – other than the traders and speculators grabbing a chance to further gouge the world for their own personal benefit.

 

We have seen similar situations recently when a refinery closes for a day or two because of bad weather. Or when a Nigerian pipeline gets looted or attacked by those who feel excluded from the national bonanza. As if a single locus of supply or transport is going to impact upon the needs of the entire world. In a time of plentiful supply and growing reserves known to be far greater than current production for the next fifty years.

 

Please. Don’t. Insult. Our. Intelligence.

 

The same applies to the traders of other commodities – particularly food. They have been only too pleased to hitch themselves to the coat tails of the oil traders and to take similar advantage.

 

Sure, the world’s population is growing and, yes, the new kids on the middle class block – the Chinese and the Indians – are, not surprisingly, wanting more and better food than they have had for the last couple of thousand years, as well as all the shiny toys that the West has been flaunting in their faces since the 1800’s. But, thanks to the Green Revolution of the past few decades, the world is not, in fact, short of food and we have the land and technology to feed many times the present global population. Properly set up and managed, just Zambia, Zimbabwe and Mozambique could, on their own, provide almost half the world with staple cereals.

 

On the pretence of a supposed food shortage, staples such as wheat and rice are traded and re-traded many times, each trade generating a profit for the traders until we have the crazy situation where, for example, rice has risen in price by at least 70% in the last three months and Thai rice farmers are having to put armed guards on their paddy fields.

 

Then there are the speculators who purchase large stocks of certain commodities (often in Third World countries) when prices are low – usually at harvest times when the market is glutted – and then hoard those stocks away from the marketplace until existing supplies diminish and prices rise in response. The use of foodstuffs and fuels as mechanisms of profiteering against the human right of access to affordable food is cynical and barbaric.

 

Contributing to the lunacy of the current price rises in commodities is the next group of “conspirators”, the large retail chains.

 

Without contributing one whit to the production of the foodstuffs or oil products they peddle, the retail chains can charge the consumer anything from 25% to 500% above cost for the doubtful privilege of distributing the goods to within reach of that consumer. (Real estate chains, for example, can’t do that but have been accused recently of deliberately and artificially inflating the asking prices of properties in order to increase the size of their commissions. The concept of charging whatever the salesman thinks the dumb schmuck in front of him might be stupid enough to commit himself to prevails everywhere). No wonder property prices now prevent first-time buyers from entering the market and forcing people away from their ancestral roots to seek survival in the global urban migration.

 

Perhaps it might not be so grotesque were these chains to pay their workers over the legal minimums; or to employ people on a basis other than casual and temporary; or to stop using their commercial volume purchasing advantages to coerce farmers and independent distributors through restrictive practices into accepting prices which then render those businesses marginal.

 

Matters are worsened when one considers the fact that these chains spend many millions (Rands, Dollars – it doesn’t matter) advertising in the print and electronic media with the constant and perennial claims of being the cheapest and offering the greatest savings to the consumer.

 

Such claims would only be justified if retail prices were not the result of price fixing and collusion between the wholesalers and retailers, as well as between the retailers themselves. Recent investigations in Australia, Britain and South Africa indicate that price fixing is rife and may, in fact, be prevalent – especially through the good old “recommended retail price” mechanism.

 

The final party to the “conspiracy” of artificial prices is the consumers themselves.

 

Consumers are their own worst enemies. Motivated by their own personal greed, stimulated by enticing advertising, too many consumers will willingly pay whatever is asked. Their desire to have whatever it is that they are desirous of feeds the concept of being allowed to charge whatever the market can bear. They have forgotten the old days of the village market where prices were negotiated to the satisfaction of both buyer and seller. If neither party was happy with what was being offered then that party could decline to trade and depart the scene.

 

A high street supermarket, for example, is nothing more than a village marketplace for the local community (many such supermarkets, in fact, claim such a heritage for purposes of brand identification). But because a supermarket has got pretty displays, clean floors, banks of glittering refrigerators and piped Muzak, people have been intimidated into thinking that they are no longer permitted to haggle. The price tag on a shelf is nothing more than an indication by the retailer of what sort of offer he is prepared to consider for that particular item. If the consumer accepts that tag then that is what he is offering and the retailer is only too happy to accept both the offer and the settlement.

 

So, although the consumer is all too often the victim of artificially high prices, he is also stupid not to realize the power at his command were he to challenge the exorbitant prices confronting him and to make an amended offer. If the retailer doesn’t like the offer he can ask you to leave his premises and thereby lose a sale. If sufficient consumers likewise challenge the retailer’s overly high margins that retailer would soon have to re-consider his position or face the prospect of going out of business.

 

The consumer as a group also fails to realize that, if push came to shove, he could forego one or two meals or delay by a few days or weeks the purchase of that washing machine/fridge/lounge suite/car as a way of demonstrating his power to the retailers. Aside from the health and moral benefits to be had, the temporary drop in sales for retail chains could create sweaty brows and an increased consumption of antacid tablets sufficient to bring about a re-consideration of extorting monstrous margins in favour of reasonable returns within a stable price environment.

 

I do not know the answers to solving the present crisis in food and fuel prices. But I do know that we need to do something to curtail and control the excesses of what is an otherwise workable system.

 

Capitalism needs – desperately – to find a path away from the boom and bust short-term maximum gratification of the profit motive. Sustainability and eventual equilibrium needs to be achieved so that the one can profit but not at the expense of the other.

 

Additionally - and equally desperately - the concept of pricing to what the market can (only just) bear needs to be adjusted to one where prices are directly related to fixed and fair margins over the cost of production.

 

Only once such equity is achieved can capitalism then be justifiably linked to democracy.

 

Money could still be made in large enough amounts to continue attracting the interest of the intrepid. But we must also find a way to enable the less intrepid to survive in relative comfort and security.

 

 

Spearpoint.

27 April 2008

To the Unknown Commentator

 

 

A couple of weeks or so ago some kindly soul sent Spearpoint some nice comments about this blog. The same person also kindly offered to add my blog to his RSS feed.

 

Whoever you are, I thank you.

 

However, I owe you an apology.

 

My antediluvian skills with a computer caused me to (inadvertently) delete your mail which, for some obscure reason, had appeared on my spam list. Your highly flattering comments were flushed away with the dross of auto and other insurance offers.

 

Mea culpa.

 

Please do not think that I am so typically South African as to have ignored your mail or that it was not greatly appreciated. Those who would take the time and trouble to respond to this little blog make the whole exercise worthwhile for me.

 

If you wish to contact me again I shall be only too pleased to properly acknowledge you and your comments.

 

My thanks again.

 

Spearpoint.

 

 

Thanks, Synaptoman

 

 

 

You made my day with your take on a possible solution to the problems of our northern neighbours.

 

http://synaptoman.wordpress.com/2008/04/09/20-reasons-to-annex-zimbabwe/

 

Spearpoint.

South Africa’s Road Carnage

Despite the fact that South Africa has some of the best roads to be found in Africa, the use and abuse of those roads kills and maims many thousands of lives each year.

The amazing thing about all these accidents is that they continue to occur unabated even though everyone from motorists to the government periodically expresses horror and concern over the statistics.

We have the laws. We have the police. We have the responsible government department(s) to manage the roads and their use. We have the funds necessary to build, maintain and police those roads.

However, and as usual in this country, we lack both the competence to do the job properly and we lack the will to do it. The situation is, truly, shameful.

There are several aspects to the overall situation, some relatively minor, others gravely serious.

1. THE ROADS

As mentioned, South Africa does possess some very good roads. The vast bulk of the road network was inherited by the ANC government from the days prior to 1994 when control and management of the country was taken over from the old apartheid government.

Unfortunately, many of those roads, including major arteries, have had little, if any, maintainence performed on them in the intervening years. There are roads which, in the decade or so that I have lived in this country, have never been re-surfaced or had anything done to them other than some minor patching; these are roads that I, personally, have used on a daily or weekly basis for many years.

Perhaps those roads are a testament to the road-building skills of the old days since they are still servicable despite starting to exhibit the inevitable deterioration stemming from continuous use over long periods of time. They are, however, beginning to crack up and when they do start to fail in a big way the costs and disruptions are going to be massive on an unprecedented scale.

Rather like a penny-pinching car owner who fails regularly to service and maintain his vehicle, eventually something big and complicated will let go in an unpleasantly catastrophic way. The expensive sounds emanating from somewhere under the car indicate to the driver that life is about to become, in the manner of the old Chinese curse, interesting - and significantly more costly.

Such has been the apparent approach of the government to our road network. Correct repair and maintenance of our roads has been relagated to the back burner.

The top patching of small potholes, where it is done at all, is all too often just cosmetic with little or no deep seated repairs of the substrate beneath the tar.

Larger potholes tend to be left alone as just another surface obstacle to be avoided - if you’re lucky. When they are repaired they are often patched with the incorrect tar mix; the first few trucks passing over them - particularly in hot weather - tends to establish and then deepen pronounced grooves in the surface which can act much as tram tracks do on the steering of any vehicle encountering them.

Many a driver has had the disconcerting high-speed experience of finding unexpected potholes which can run you off the road, snap a shock absorber or burst a front tyre. The results can be spectacularly fatal.

As well as the road system being, in general, poorly maintained, many roads (including from before 1994) are also badly built and marked. Roads with negative or reverse camber. Roads carrying large volumes of traffic built without proper foundations and footings. Roads carrying the wrong road markings - for example, permitting overtaking on rising left-hand blind bends. Road signage that is either absent, misleading or just plain wrong and dangerous.

THE TRAFFIC

Together with the rest of the world in recent years, South Africa has been enjoying relatively good economic times. Sales of new cars and the ability (until recently) of more and more people to fuel and run those vehicles has resulted in a considerable increase in the size of the national fleet.

The outcome has been a congestion which, even for a Thirld World country, has been impressive in its proportions.

As with most countries the provision of new roads and the upgrading of existing routes has lagged behind the influx of vehicles on to the streets. In South Africa’s case, however, accomodation for the much greater numbers of cars and trucks has been almost non-existent and the consequences in terms of increased travel times and the wastage of fuel by idling or slow-moving vehicles in traffic jams has been awesome.

The road network has not been extended in any meaningful way. Despite the vast and increasing revenues and reserves of the government as SARS has relentlessly expanded the tax base of the country, there is little evidence, in respect of new and better roads, that those revenues have been used in any significant way to enlarge and improve the road infrastructure of South Africa.

The increased traffic volumes will only accelerate the already rapid deteriorating condition of the existing road network. This will exacerbate an already bad congestion problem and will significantly worsen the inevitable delays and congestion that await us if and when the government ever decides to repair and upgrade our roads to the level necessary to maintain and sustain our economy. Even the impetus of the World Cup in 2010 will result in little of significance; the main emphasis will be impressing the visitors to that white elephant event, few of whom will ever venture far off the major routes. Thus some of the main highways will be tarted up but the working roads in the towns and rural areas will be unlikely to see any benefits.

Even high profile projects such as the Gautrain are, much as in the days of the old Soviet bloc, more for national pride and prestige rather than solving practical issues. Aside from the limited service the Gautrain will provide in terms of routing and catchment areas, it’s going to be too damned expensive for ordinary people to utilise on a regular basis - even though the government is currently working to make the road link between Johannesburg and Pretoria, for example, much, much more costly to the average motorist through the imposition of new (and exorbitant) toll fees in an attempt to coerce motorists to abandon their vehicles and use the train instead.

THE VEHICLES

Even though the recent good times in South Africa have seen a considerable increase in new vehicle sales, there remain huge numbers of older vehicles in everyday use. These are mainly owned by those who cannot afford the cost of a new car and are, therefore, less likely to be correctly and safely maintained.

It is not at all uncommon to see significant numbers of dangerous and unroadworthy cars, pick-ups and trucks - their passengers or goods bursting from the frequently overloaded vehicles, smoke billowing from the engines and various bits and pieces of the vehicles fluttering madly in the slipstream of their passage. All proceeding along quite flagrantly on the open public highways, reasonably secure in the knowledge that the chances of being pulled over by traffic authorities are slim enough to warrant the gamble.

Additionally, in the absence of any credible mass transit system (road or rail) in South Africa, some 60+% of the commuting public are forced daily to utilise a fleet of some 130,000 minibus taxis, a great many of which are seriously and dangerously delapidated, driven, apparently, by the largest single group of homicidal maniacs in the country. Accidents involving these minibuses tend to be gory and low on survivability since a number of factors militate against the unfortunate passengers - for example, the high speeds which the drivers favour owing to their pay being based on commission, the poor maintenance of the taxis, the ageing fleet and the incredible reluctance of the passengers themselves being willing to compel the poorly trained drivers (in many cases with either fake licences or no licences at all) to slow down and to drive more carefully and considerately.

The much-vaunted taxi publically funded recapitalisation scheme, supposedly meant to assist taxi owners to remove the older and more dangerous minibuses from the roads, was launched amid great fanfare by the Minister of Transport a couple of years ago. To date, despite the allocation of vast amounts of money, little has been achieved - I understand only some 10% of the taxi fleet has been renewed. There seems to be little urgency about this programme despite the constant complaints from government that the public health system is stretched beyond capacity owing to factors such as, for example, unduly high numbers of road injuries and fatalities.

THE DRIVERS

Whilst not the worst drivers that I have encountered around the world, South Africans are, nonetheless, pretty high on the list.

In general they are unsafe, inconsiderate of other road users, belligerent and very poorly trained. Most tend to have leaden right feet and the drivers of larger cars and trucks all too often subscribe to the “might is right” maxim.

Traffic penalities are, by and large, a joke. Collecting fines and then ignoring them seems to be a national pastime.

South African drivers are never averse to taking risks and shortcuts - and I don’t mean just on the roads themselves. It is so easy to buy a driver’s licence or roadworthy certificate that one marvels that there are any legal drivers at all on our roads. Speed limits are seen as general guidelines at best and minimum speed requirements at worst: Traffic lanes are optional extras and solid white lines are definitely for other people: Alcohol heightens awareness and improves confidence and reaction times.

Far too many South African drivers consider themselves to be invincible and immortal. Accidents happen only to other people. Road rules are for moffies and grannies.

THE POLICE AND OTHER AUTHORITIES

The police in South Africa come in for a great deal of highly justified criticism, even though there are some remarkable individuals who work hard and genuinely give service to their communities. Their’s is not an easy task at the very best of times; it is especially sad that there is so little support for the good cops in the form of decent funding, pay, training and the removal of their incompetent and corrupt colleagues.

The make-up of the police in South Africa is confusing and confused.

Trying to figure out who does what and under what circumstances has certainly left me scratching my head on more than one occasion.

We seem to have a national police force. However, there also appear to be provincial forces, metropolitan forces and traffic police. I am not the brightest spark on the planet, so it’s no great surprise that I am confused in my old age. Plus the fact that I was not raised in South Africa so I have not grown up with the peculiar South African brand of logic that determined the way things have been set up in this country.

Unfortunately, the police often appear to be as confused as I feel and this has a marked impact on the policing of the country’s road and traffic.

It is relatively unusual to see a police vehicle on the roads during the daytime. Most, it would appear, are parked at the various police stations, their occupants firmly ensconced away from the elements, busy losing paperwork, sleeping, extracting confessions from crime suspects and eye-witnesses alike, running their private businesses, goofing off or doing whatever else might otherwise occupy them for the duration of their shifts.

It is almost unheard of to come across a police car on the roads at night. It seems that the approach of sunset sends every police car homeward bound, bearing the officers away from the dangers of nightime South African streets; the police retire to the safety of their police stations or homes and the streets become the domain of the lawless.

South African police do not, as a general rule, patrol. There are no block or neighbourhood patrols as people in the US or Europe experience. Police officers and their vehicles seem to be kept at the police stations awaiting calls to specific incidents to be reported before they venture out on to the roads. Even then, it can take many hours - in some disgraceful instances, days - before police officers will attend the scene of an alleged crime or incident.

Thus, the police are reactive rather than proactive and preventative in their actions.

There is confusion between the roles of the “ordinary” police and the traffic police.

The ordinaries, in their blue uniforms, seem never to act upon traffic-related incidents and offences. This despite assertions from the police that an ordinary officer is fully authorised in law to pull over traffic offenders, to issue tickets or fines and to commence the prosecution processes. Commit a traffic violation in front of an ordinary police officer and it will be ignored.

Even the traffic police do not seem to patrol, on the lookout for moving violations of the traffic laws. Much of their time on the roads appears to be spent either operating road blocks or, more usually, lying in wait on major routes, hidden behind bushes or walls, to snare speeding motorists.

This, of course, generates much revenue (when the fines are ever paid) and is clearly used by police and metropolitan managers primarily to supplement general state and municipal revenues.

Further confusion manifests itself when it is realised that licencing authorities are fragmented into municipal and provincial offices. This generates competition and competing goals between the different authorities and trying to get any harmonised, concerted action on improving the safety of South African roads and vehicles is well nigh impossible.

No national standard of policing and law enforcement policy appears to exist; if it does then differences in the standards of performance of each authority’s personnel negate whatever unity of purpose that may be intended or legislated.

The application of the information supposedly held on various national databases, such as, for example, e-NATIS, is disjointed and uncoordinated, resulting in gross inefficiencies and delays.

It is sad to say that the police - in the form of senior officers and their political masters - are long on rhetoric, promises and self-serving public relations stunts but short on action and results. Publicity campaigns - costing many millions of Rands - are launched without support or serious action beyond a few televised pictures of scores of police officers manning a single road block during a holiday weekend. There is little or no presence on the less-travelled secondary and back roads. The concentration of so many police officers in a handful of highly publicised road blocks reduces their effectiveness on the back roads and elsewhere, thereby contributing to the avoidable deaths and injuries that are ignored at other times of the year.

CONCLUSIONS

Through a combination of political ineptitude, financial irregularities and professional incompetence South African roads are amongst the most lethal in the world.

The lack of political will deprives road construction and maintenance of impetus, enforced standards and skills. It also denies the various enforcement authorities the discipline and pride required to tackle and master the massive problems of improving the skills and attitudes of the driving public to those levels consistent with the stated aspirations of the politicians.

Political promises made in the song and dance routines during election times must be honoured or the relevant politicians must be held personally responsible and relieved of their duties and positions.

Roads must be built, extended, widened, maintained and policed. It does not take rocket science to understand and address the problem.

Policing, in particular, must be improved.

Institute and maintain police vehicle patrols on all roads. Where appropriate, start foot or bicycle patrols and begin winning the hearts and minds of the ordinary citizen. One way or another, put the police out on the streets, visibly policing and interacting with the communities of this country. Take the police out of their station houses; employ civilians for the clerical and administrative functions.

Ensure that the police out on the streets explain and enforce the laws of this country. Make the police active rather than passive law enforcers; moving violations are the cause of accidents and these should be the focus of traffic law enforcement. A cop sitting behind a radar gun cannot see the idiot overtaking on a solid white line on the approach to a blind bend with oncoming traffic. Nor will he be aware of the overloaded truck or minibus, the tailgating of the impatient executive in his shiny new BMW, the erratic driving of a drunken or unlicenced driver, the shifting load of the semi-trailer or the smoking rust bucket that may or may not be able to stop when the car in front has to brake to avoid the bottle that has just been tossed out of the car in front of him.

Swallow the illusions prompted by imagined national pride and take a look at how other countries have addressed and solved their traffic problems.

Back in the 1970’s (I don’t know if it has continued since then) Australia had an excellent scheme whereby new drivers (including those returning to the roads after the loss of their licences) were required to display on their vehicles a “P” plate - the “P” indicating to all other road users that the driver was on a “provisional” licence for a period of one year. Certain restrictions applied to the learning driver during this probationary year - one being, if I recall correctly, that, regardless of the posted speed limit on any particular road, the driver was not permitted to exceed 80 km/hour under any circumstances. Everybody hated the “P” plate; it told everyone that you were a novice and it was, frankly, embarrassing. But it warned all and sundry that, although you had passed your driving test, you were still in the learning stages of your driving career and should be treated with a degree of caution.

Other countries had introduced the points sytem for drivers’ licences whereby points are deducted from a fixed limit for infractions of the highway code. Once all the points were lost the licence was then suspended and you were not permitted to operate a vehicle until such time as you demonstrated renewed competence behind the wheel by passing a fresh driving test.

Another idea - this from the UK - is that every vehicle older than about 3 years old on the road must pass a roadworthiness test every year. Again not exactly a popular measure but it gives some degree of surety that the clapped-out jalopy sitting behind you at the traffic lights has a fair chance of staying in an assembled condition as it accompanies you on the highways.

Finally, and this is a recurring theme with old Spearpoint, make each government, provincial, municipal and police officer personally responsible for their actions and omissions in applying and enforcing the road laws of this country.

If anyone, high or low, doesn’t do their job properly, sack them. If they have been negligent or corrupt lock them up, throw the book at them and lose the key for a while. A public trust rests in these individuals which must be roundly punished if it is broken or betrayed.

Above all, and until those who have undertaken to make our roads workable and safe for all users actually achieve that objective, drive carefully. Drive on the permanent assumption that the turkey barrelling down the freeway alongside you will demonstrate at some moment - beyond everyone’s normal powers of prediction - that he is quite capable of some kind of dumbass stunt that will endanger not only your life but could also have a seriously negative effect upon the re-sale value of your car.

Spearpoint.

 

 

 

 

 

 

 

 

 

 

 

 

Advertising Awards

I am given to understand that there is going to be some sort of advertising awards ceremony/pageant in the very near future.

APEX? I’m not sure, so apologies if I’ve got this completely arse about.

All I want to say on this - although I’m damned if I can see any real value in a bunch of pseudo journalists and film makers making a song and dance about patting themselves on their collective back for their efforts at selling us stuff that we don’t need at prices we can’t afford, all in the name of art - is that I wouldn’t want the industry to get too carried away with its self-congratulatory primping and strutting.

I know that South Africa - contrary to its own perceptions - is just another too-proud Thirld World country and that we don’t figure too greatly in the overall scheme of things.

But it does irk, somewhat, when global brands, seeking to make money out of some of the poorest of the poor in the world, add insult to injury by taking television adverts from other countries and transplanting them to insignificant markets such as South Africa, barely making the effort to target the potential market.

Foreign beauty, facial, household cleaning products- even motor vehicles - often appear in South African television adverts in their original languages or accents but with minimal and, apparently, amateurish attempts at voice-overs and lip-synchs.

We South Africans are not terribly sophisticated even in the the wettest of our dreams, but I do believe that, if a multinational company is anxious to separate us from our hard-earned cash, that company should at least make some reasonable attempt to give the appearance of trying to seduce us by spending a little of their money on the object of their amour.

Perhaps I’m the only one, but I feel insulted and degraded watching these kung-fu-like movie characterisations. This South African would like to believe that I am worthy of a decent bit of seductive guile and effort - say, for example, along the lines of a good candlelit meal in a good restaurant followed by champagne, sweet talk and promises in an elegant five-star hotel, rather than a burger and chips from the local takeaway quickly followed by a quick try at getting my knickers below knee-level on the back seat.

I may be cheap and blowsy but my attentions are more attentive if I’m treated right.

The advertising industry and their clients must not expect this particular consumer to patronise their products if they can’t be bothered to address me with a bit more respect.

 

Spearpoint.

 

Eskom’s “Commercially Sensitive” Information

Reports in the press today reveal that Eskom has asked that certain portions of its submission for a 53% tariff increase to the Energy Regulator (NERSA) be withheld from public scrutiny for reasons of commercial sensitity.

NERSA has, apparently, complied with that request.

This is completely mind-blowing.

How can a state monopoly, with no competetion whatsoever in the electricity supply and distribution market, possibly have anything it does not wish to have made known to those competitors (who don’t exist)?

Who are they trying to hoodwink?

Unless, of course, there are certain facts concerning the actual costs of their operations, their actual profit margins and their staffing costs and overheads which, if the South African public were to become aware of, would reveal just how any application for increases in tariffs is unjustified and, possibly, fraudulent.

Eskom, you are a public entity. You have no competition. Ergo, you have no commercial secrets in the normal sense of the term.

Moreover, Eskom since you are state-owned that means that every member of the South African public is - both by definition and default - a shareholder and, as such, it is illegal to withhold or to seek to withhold information regarding your operations and finances.

All you are entitled to withhold, Eskom, is information regarding the physical operational security of your enterprise since you are a national strategic asset which could be vulnerable to attack and sabotage - and the secrecy necessary on that topic alone must be subject to the oversight (God help us) of the Minister of Safety and Security.

NERSA, in its lap dog roll-over for Eskom and t