South Africa

JOHANNESBURG – The ongoing debate about the tolling of Gauteng’s intra-provincial highways has highlighted the urgent need for South Africa to invest in its public transportation system, Nobel-winning economist Professor Joseph Stiglitz argues. The Columbia University professor, who is in South Africa to participate in a conference organised by the Economic Development Department, says there is “no excuse” for the country not to have a fully functioning public transport system. Financing such public transport infrastructure, he acknowledges, will always entail a “difficult balance”, as not charging a user that can pay locks up resources that could be used elsewhere. By contrast, where such charges are imposed on those that cannot afford them, it could result in economic exclusion. The solution “almost inevitably” lies in an “imperfect” compromise. The “calculus” policymakers use to weigh the specifics of such a compromise should work out whether those being tolled are in a position to afford to pay for the infrastructure. “If it turns out that 99% of the people who would benefit from the free toll are, in fact, people who are high income, then most of the benefits of not tolling go to people who could be making a contribution towards helping to pay for the infrastructure.” Should most of the people turn out to be in the low-income category, however, such a system will involve a high cost not only for those individuals, but on the economy as a whole, as it will undermine efficiencies by preventing people from accessing workplaces. Regardless of the outcome of such an assessment, efforts should still be made to protect low-income people needing to use the transport network.

JOHANNESBURG – Rising prosperity in South Africa is likely to increase water consumption and also result in a more unequal distribution of water resources, Global Water Partnership patron Maggie Catley-Carlson cautioned at the South African Water and Energy Forum. Government will, therefore, need to grapple with the water, energy, food and climate ‘mega nexus’ in an integrated way to find equitable and environmentally acceptable solutions. Elaborating on the interconnectedness of this mega nexus, she explains that it takes a litre of water to produce each calorie consumed by human beings. A scarcity of water will, therefore, seriously undermine rising food security. “Food demand is expected to double over the next 50 years, owing to the changing diet and growing population.” US Army Corps of Engineers Institute for Water Resources Dr Jerome Delli Priscoli adds that water security will also affect future social stability. “There needs to be a balance between how to allocate and reallocate water, because when citizens get rich they use water differently,” he said, noting that about 1.4-billion people already lacked access to safe drinking water.

JOHANNESBURG – The African National Congress (ANC) has warned its youth body against making pronouncements that undermine the constitution of the organisation. “Regrettably, the ANC Youth League’s (YL’s) decision to undermine and defy the decision of the NDC (national disciplinary committee) effectively defines the organisation outside of the ANC constitutional parameters,” said party spokesperson Jackson Mthembu in a statement. “That is totally un-ANC . . . The leadership of the ANC will look at these developments and respond appropriately.” He was reacting to a decision by the league’s national executive committee (NEC) for Julius Malema to continue as president, despite a suspension that was imposed by the NDC. In an apparent act of defiance, the ANCYL says it will never be removed by a process that excludes the participation of youth members, and that Malema should continue performing his functions as league president. Mthembu said the NDC’s decision to temporarily suspend Malema was an injunction deriving from the party’s constitution. “As the ANC, we believe that the constitution of the ANC is the ultimate authority on matters of the organisation and thus sacrosanct to all its members and structures, including the ANCYL NEC,” he said. “As such, all structures of the ANC were expected to abide by the decisions emanating from bodies mandated by the party’s constitution.” The league argued that the decision to summarily suspend Malema on April 4 for calling President Jacob Zuma a dictator was not officially communicated to the league.

PRETORIA – Trade and Industry Minister Dr Rob Davies selected certain pharmaceutical products for domestic production in the ‘second wave’ of designations in line with the amendments to the Preferential Procurement Policy Framework Act (PPPFA). A potential list of more than 70 pharmaceutical products was being finalised and included a two-year, R2.5-billion oral solid dosage tender. The amended PPPFA, which was promulgated in December last year, allowed the Department of Trade and Industry to stipulate the sectors where departments, agencies and State-owned enterprises had to procure from local manufacturers or providers. The act aimed to create security of demand for domestic production and enhance local manufacturing capacity to create decent jobs, add value and build export platforms. In February, the ‘first wave’ of products was designated, and this included rolling stock, buses, canned vegetables, clothing, textiles, footwear and leather products and set-top boxes. Davies states that the designation of the pharmaceutical products will benefit the country both in terms of health and the economy.

Africa & the world

WASHINGTON – The International Monetary Fund's (IMF) bid to win a big boost in funding to handle the eurozone debt crisis hit a speed bump when Brazil demanded more power at the IMF for emerging economies as a condition for lending it extra cash. Brazilian Finance Minister Guido Mantega laid out the terms for a deal after a meeting with fellow Brics nations Russia, India, China and South Africa. "We are not ready to set a figure, because there are preconditions that have not been fulfilled by the countries – whether they will comply with the agenda of reforms," he says. Support from China, Russia and Brazil is critical to strengthening the firepower of the IMF. Its managing director, Christine Lagarde, wants at least $400-billion in extra funds to protect countries from any worsening of the eurozone debt crisis. So far, Europe and Japan have pledged $320-billion and the IMF is relying on the Brics to plug the hole as it seeks to double its war chest. Calling the eurozone the "epicenter of potential risk" for a world economic recovery that is "timid and fragile," Lagarde says she is working on a deal. "We expect our firepower to be significantly increased as an outcome of this meeting," she says. The IMF firewall will complement the $1-trillion in emergency funds for Europe agreed upon by the EU leaders last month. Lagarde welcomed those funds as a "significant" step toward addressing eurozone problems but also urges the EU to use that money to directly inject capital into banks.

KHARTOUM – UN secretary-general Ban Ki-moon has termed South Sudan's seizure of a disputed oil field in Sudan an "illegal act" and called on both countries to stop border clashes spiraling into war as the US warns of a "worrying" escalation in rhetoric. Clashes along the ill-defined border between the former civil-war foes has led to a standoff over the Heglig oil field after it was seized by troops from South Sudan, which declared independence last year. "I call on South Sudan to immediately withdraw forces from Heglig. This is an infringement on the sovereignty of Sudan and a clearly illegal act," Ban says. "I also call on the government of Sudan to immediately stop shelling and bombing South Sudanese territory and withdraw its forces from disputed territories," he says. "I have impressed on both governments the necessity of ending the fighting and returning to negotiations. They have yet to heed our call." Mounting violence since Sudan split into two countries last year has raised the prospect of two sovereign African States waging war against each other openly for the first time since Ethiopia fought newly independent Eritrea in 1998-2000. Sudan's President Omar Hassan al-Bashir all but declared war against his neighbour, vowing to teach South Sudan a "final lesson by force" after it occupied Heglig, while Juba accused Bashir of planning "genocide." "The escalation of rhetoric on both sides is indeed worrying and it's only fanning the flames," US Ambassador to the United Nations Susan Rice, the president of the UN Security Council for April, says. "The effort ought to be made to reduce the flames, douse them, and return to the table to resolve the outstanding issues that have made relations between north and south so difficult in the wake of independence," she adds.

CAIRO – Egypt’s search for a successor to Hosni Mubarak is losing credibility. A move by the authorities to bar ten of the 23 candidates, including three top contenders, could reshape the Presidential election just four weeks before the polls start. This will add to the concerns of investors who should worry more about a timely, free vote than about who actually ends up in charge of the country. Liberals will not mourn the loss. The Muslim Brotherhood’s primary nominee, Khairat al-Shater, popular hard-line Salafi preacher Hazem Salah Abu Ismail, and Mubarak’s former chief spy, Omar Suleiman, are among those kicked out of the race, pending appeals, by the election commission. Past criminal convictions, citizenship problems and some technicalities were given as reasons for disqualification. But this exclusion from the candidates’ ranks is a mixed blessing for foreign investors, who may have some reason to rejoice. The election of Abu Ismail will stoke fears about the impact of ultra-conservative Islam on the economy. That of Suleiman will raise concerns of corruption from the old guard. A win by al-Shater, meanwhile, will consolidate power in the hands of one party, following the Brotherhood’s dominance of Parliamentary elections. Their exit leaves room for more market-friendly moderates like Amr Moussa, a former Arab League secretary-general, or ex-Brotherhood member Abdul Moneim Abol Fotouh, who was expelled from the movement for launching his own Presidential bid last year.