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Dear friends and fellow South Africans,

"A renewed global recession is just around the corner." Somehow when
this statement is made in the United Nations' World Economic Situation and
Prospects 2012 report, it attracts more notice than when it is said by a
member of the opposition in our country's Parliament.

I have been sounding this warning for the past two years, because I have the
capacity of reading the economy through the processes of history, rather
than purely through economic analysis. I may not be an economist, but I am a
student of history and I have seen enough of this world to understand the
cyclic nature of transition.

We are, at present, in the middle of a major historical transformation of
the economies of the world, both at the productive and financial level.
Manufacturing capacity has been destroyed in the West and consolidated in
the East. Both financial centers and products are following the same trend.

This is a painful process which will continue to create instability and,
from this instability, recessionary cycles, until the process has been
completed and a new world economic order has been established on the basis
of which the world's recovery can finally commence.

In this context, the real question - which I have put to the ANC for ten
years, with no answer - is what products and services South Africa will
bring to the international market in order to make a living, over and above
the usual pool of commodities which thus far has constituted the bulk of
South Africa's wealth in international terms.

In the past ten years the Government has focused primarily on job creation,
which is good. However, it has generated jobs mainly through redistribution,
which is not good.

Government itself has employed people, and forced private entities to comply
with a number of social obligations and responsibilities, all of which has
increased the number of people employed. However, this operation has not
increased how much we produce and the overall amount of money the country as
a whole makes to earn a living.

Last year the Minister of Finance, aware of this problem, tried to bridge
the gap by launching the idea that government employment should be tied to
the building of infrastructure. However, there are no concrete plans for
this to happen.

Infrastructure genuinely tailored to improving our industrial bases and
productive capacity and providing other forms of externality would generally
help the country to make more money to earn a living. But this will require
building advanced infrastructures for the 21st century, both hard
infrastructure as well as soft infrastructure like free nationwide broadband
Internet coverage. I see none of this in the making.

What we have seen a lot of is social programmes and programmes aimed at
extending the welfare state. All these programmes are good. But it must be
accepted that they come at a cost and are not aimed at making us more money
or enabling us to develop internationally viable products or services.

In the past 2 years, the welfare state has been extended to companies,
enabling many segments of our industry to survive, even though they could
not have survived without subsidies from government and other forms of
regulatory or trade protection set out to defend them from international
competition.

Government has even increased its own cost of delivering services by
restricting itself to consuming only certain products because they are South
African made, even though there are cheaper international substitutes. This
has been done in the hope that it will stimulate a new industry capable of
exporting without subsidies. But, in this respect, there is nothing more
than a speculative hope while the costs we are paying are huge.

The costs are not only fiscal, in the form of money the government pays out
to industries or individuals. There are also social costs which are directly
exacted from South Africans as if they were a private tax. Because of
Government's tolerance of collusion in the banking industry, the insurance
industry and the cell phone industry, South Africans are paying far too much
for the products provided by these three industries, as compared to the rest
of the world. This enables these industries to make good profits, while the
country losing money as a whole.

Allowing foreign companies to provide directly to our consumers better and
cheaper services in respect of banking, insurance and mobile communications
would help all South Africans, individuals and businesses alike, to become
more competitive and have more income at their disposal, whether for
consumer spending or investments.

The fact is that the ANC has jumped into the shoes of the National Party and
pursued the same industrial policy, just changing the beneficiaries from the
old Afrikaner economic circles to the new circle of black diamonds.

The rest of the population remains like cows to be milked until dry, whether
they belong to the middle class or are poor people in rural areas struggling
to pay for airtime, or wondering why so much of their money went into bank
charges which in most other countries in the world do not even exist.

It will be difficult to seriously address economic problems in our country
for as long as this mindset remains and, possibly, for as long as we do not
have a profound change in the political leadership of South Africa.

Yours in the service of our nation,