South Africa has no idea how to create wealth

By weakening to nearly R8 to the dollar, the rand must now rate as the most undervalued currency on the Economist’s Big Mac Index at minus 60% against the dollar replacing the Philippine peso at the bottom of the purchasing power parity table.

Maria Ramos of the Treasury says she simply cannot understand why the rand collapses. Well, she need look no further than that foreign direct investment last year was down by half on the previous year, according to Business Map SA.

The currency has lost 18% to 25% against the euro and dollar since South Africa’s much-vaunted budget in February last year and the government introduced its trilogy of “wealth and redistribution” taxes.
These are: taxes on overseas assets for residents, on capital “gains” (without indexation) and the unicity property “wealth” tax (still being developed) based on the market value of people’s homes. All of these taxes feed on currency depreciation, contributing further to divestment, poverty and the rand’s demise.

These new taxes ensure the more the rand collapses, the more the fiscus collects. Positive returns relative to hard or real currencies become almost impossible as we are rendered more uncompetitive by policy-makers and academics who understand little about how wealth is created.

Capital gains tax on sterling and dollars is very different from taxing the illusory “gain” as measured by a depreciating currency.

An asset such as a machine bought and sold for $100 over a 10-year period would pay no capital gains tax in, say, the United States. But the same transaction would incur a tax on the so-called “gain” of 240% if measured and taxed locally.

Africa is caught up in a process of impoverishment much of its own making and it wonders why nobody rushes to invest! Taxing competitiveness is like shooting yourself in the foot and then arguing economically that you are creating work for doctors, nurses and the pharmaceutical industry.

We should all be worried by a recent analysis which shows that the best-performing asset over the past 10 years, including gilts, equities and property was you guessed the rand!

Maybe the government should consider trade incentives for the export of Big Macs it might help the African renaissance and the currency!

As Peter Hain comments: we have much to be thankful for: everything will be even cheaper next year for overseas visitors to South Africa and those who invest offshore.

It is the tragedy: when it comes to creating wealth, we don’t even know where to begin. Rob Albert, Newlands, Cape Town

I am a small businessman who has recently retired and have provided for my retirement by making investments in shares with tax paid money. Now with the introduction of capital gains tax I am suddenly faced with an effective 10,5% additional tax on all sales of my shares (assuming I am paying top marginal rates). The effect is to reduce my retirement pension by 10,5%!

Surely this is an unintended side effect of this legislation?

I worked long and hard to be independent and relied on future legislation to be fair and reasonable so that I could plan ahead, as is the right of any citizen. One must bear in mind also that the capital gains tax rate of 25% may be raised at any time in the future.

Surely some relief can be incorporated into the impending legislation to alleviate this situation? P Freidberg

Shaiking in our boots

So Schabir Shaik says: “We fought evil and apartheid for 45 years. We can certainly fight the Mail & Guardian a few years more.” (“Evidence of ANC arms deal link”, January 19 to 25).

The quote signifies the ruling party’s opting for expedience and party loyalty in preference to active democracy.

Democracy is a hard taskmaster, and those who shouted loudest for it should be prepared now to practise what they preach. The African National Congress wanted democracy in this country and that is what they pledged the world. Indeed, Nelson Mandela promised that we would never be the skunk of the world again.

Democracy entails the following nonnegotiables:

l The rule of law must be stuck to;

l Freedom of the press overrides party political interests;

l Parliament is the popular watchdog;

l Opposition parties are the respected barometers of differing views;

l The interests of the country as a whole outweigh those of its leadership and their cronies;

l Corruption, even by the highest and dearest comrade, must be rooted out.

I find it amazing that attacks such as that by Shaik on the freedom of the press and, consequently, democracy are ignored by our supposedly principled institutions.

Where are all the strident churchmen, academics and students who put principle above racial solidarity earlier in our country’s history? Are we headed for democracy Mozambique-style where courageous journalists are dispatched to the grave and opposition supporters asphyxiated?

Speak out now, South Africa, or do not be surprised if we end up like a typical basket-case “democracy”. Gavin Heath, Fish Hoek

When cars fly

Steve Margo is not the “owner” of Sandton Precinct (“Living behind the barricades”, January 12 to 18). He is the operations director, and is answerable to the board. Sandton Precinct was started to collect money for the police. These days it helps people break the law by erecting road closures without municipal approval.

If Margo really believes that “Road closures are definitely not a traffic obstruction”, on which planet is he living? How can a palisade fence or a locked gate across a road not obstruct traffic? Does he think cars fly?

I propose a test, backed up by a suitable wager, say R1?000: Margo and I will drive (keeping within the speed limit) between two points I nominate. The road closure gates that are normally locked will be opened for me but locked for him. M&G reporters can supervise. Let us see if Margo takes longer or not. Rick Raubenheimer, Morningside Manor, Sandton

Ban HIV testing

Belinda Beresford, in her article “President’s panel on Aids hands over report” (January 19 to 26), demonstrates that she totally missed the point of the president’s actions by concluding that “scepticism over whether the panel’s final report will be able to fulfil its mandate ... will again raise criticism about the need for the panel in the first place”.

First of all, the scientific advisory panel was designed to help put to rest the countless contradictions inherent in the American hypothesis of an infectious, sexually transmitted Aids in Africa. Secondly, the controversial panel, regardless of it’s final recommendations, will continue to be controversial and “raise criticism” simply because of the extraordinary size and scope of the Western political and economic interests that have pounded their investment stakes so deeply into African (particularly South African) soil.

Taken in its socio-economic context, lack of consensus with the “prevailing view”, far from being cause for dismissing a panel, is all the more reason to have convened a panel!

Thirdly, President Thabo Mbeki is to be commended for wanting to examine and evaluate the facts before taking action. For Beresford to form an opinion on “scepticism over a report” that hasn’t even been published yet is fully consistent with the whole approach one finds everywhere when dealing with Aids, the very approach that Mbeki is critical of and which gave rise to the need for an advisory panel in the first place.

We can only wonder how the M&G will report on the serious inconsistencies that will be uncovered upon publication of a comparison of the Centers for Disease Control’s “HIV” test results of 2?500 African blood samples with the “HIV” test results administered with the same blood samples by five different South African laboratories. One would hope that your paper will then join Dr David Rasnick, Professor Sam Mhlongo and Health Education Aids Liaison (Heal) in calling for a moratorium on HIV testing. Reverend Dr Michael Ellner, President, HEAL-NYC

Well done, Mr President

The appointment of the Azanian People’s Organisation’s president Mosibudi Mangena as deputy minister of education is a stroke of genius on the part of President Thabo Mbeki. Not only has our president persuaded a political foe to join his Cabinet, but he has appointed an astute, thoughtful and capable intellectual who cares deeply about our educational system.

Education is at the very heart of our success as a well-developed democracy. Hence, it calls for the service of all South Africans, regardless of party affiliation, to assist our country. Mangena’s appointment will, indeed, do so. Well done, Mr President! Professor Cecil Abrahams, Bellville

Marxism under Malcolm X

The fact that Ebrahim Harvey makes a fundamental mistake in the opening line of his article “To break free from the white left”, (December 15 to 21, 2000) is a revealing comment on the state of the “left” in South Africa, irrespective of which colour he labels them with.

That Harvey thinks class struggle started only when capitalism developed demonstrates that the intellectuals of all ilks have not “imbibed” the Marxist theories, let alone done any serious critique of them.

Harvey’s plea for “black revolutionary intellectuals” to receive generous university funding is nothing more than a plea for incorporation in the system. Universities are bastions of the capitalist system. Or is Harvey saying that in the “Third World”, the role of universities is somehow different?

Capitalism evolved first in England and across Europe. It follows that the growth of the working class and its movement developed firstly in Europe. We should celebrate the heroic class struggles and gains of the Marxist movement from that time. The role of Marxist theory is to generalise that experience so that we may learn from it. Yes, there are books by Marx, Lenin and Trotsky. But to Harvey it is now time to study “Marxism” instead under Malcolm X and the Nation of Islam.

Now that the worldwide apparatus of Stalinism has been smashed, we have moved into a period in which the working-class movement can build a truly international movement based on the lessons of the struggles conducted thus far.

What is needed is an independent Marxist cadre who, despite the obvious lack of resources (no university will throw money at anyone who will produce work that will undermine the current system of capitalism: imperialism), is prepared to make a scientific study of all past class struggles, so that we can advance the worldwide struggle for socialism, and not limit ourselves to a nationalist “African” perspective.

Exploitation knows no colour, so why should we limit our theory and practice? Forward to the rebuilding of the Fourth International! Shaheed Mahomed, Workers International Vanguard League, Salt River

Betrayed by the leadership

The current furore over the exclusion of the Heath special investigative unit from investigating the government’s arms deal demonstrates yet again that a once-proud liberation movement is being betrayed by its leadership.

The writing has been on the wall ever since the government entered on its “toenadering” or constructive engagement policy with the Chinese government, in spite of the latter’s atrocities in Tibet.

If the ANC manages to call Mbeki and his cronies to heel this time, it will have my vote in future; if it doesn’t, Patricia de Lille will get it. John Brodrick, Yeoville

Whither the lotto millions?

Where has the lottery money gone from ticket sales exceeding R2,5-billion?

l The lucky winners R1,3-billion;

l The state received VAT of R350-million; and

l Uthingo has paid itself at least R500-million.

They are the only beneficiaries from lottery proceeds. The needy suffer as organisations close or reduce services through lack of funds. The Department of Trade and Industry fiddles along without a distribution policy or agency.

The amount available for distribution from the lottery, including interest, should now exceed R780-million. To date only R2,3-million (0,3%) has been distributed to public benefit organisations. It is time for a full disclosure of exactly what is going on with these funds.

We also need information on the sale of the new scratch cards and how much has been set aside from that source for “good causes”. Brian Bailey, Somerset West

Only 5% of mothers will get free drugs

The Pan Africanist Congress of Azania has welcomed the introduction of an anti-HIV programme, including Nevirapine, for pregnant mothers in 18 state hospitals. However, it must be pointed out that this is only a very limited service.

This “massive” programme to protect babies of HIV-positive mothers (“Free treatment of HIV+ mothers”, January 26 to February 1) turns out to be a damp squib. The projects once again demonstrate the lack of urgency of the Cabinet and, indeed, the president, to save lives.

Only about 5% of pregnant mothers will be covered by this scheme. Two hospitals one urban and one rural have been chosen in each province to provide counselling, testing and Nevirapine as needed.

The Nevirapine is provided free by Boehringer Ingelheim, the counselling will be done by trained counsellors and nurses, the test strips cost R6 each, and the six-month supply of milk powder about R300 a mother. Only 50 000 mothers will be covered, leaving a million outside the projects. The overall cost is going to be about R10-million, which is a fraction (0,0025%) of the cost of the controversial R43-billion arms purchase.

About 1?500 babies’ lives will be saved, but 28?500 will continue to die unnecessarily every year. If all mothers were in the scheme, then 30 000 babies a year would be protected fom an Aids death.

Why is the government still dragging its feet? Clearly it was not the cost, nor was it the alleged toxicity of the drug. The Aids Babies Battling Aids trust has been dispensing Nevirapine to pregnant mothers for nine months now without any legal, ethical or financial problem whatsoever.

There is only one possible explanation: the growth, employment and redistribution policy and its demand that any public expenditure be slashed. Privatisation is looming in the health sector and the poor are already getting a worsening service every year.

We are told that the projects will run for two years, during which time the “operational” glitches will be ironed out. Funny that when the Abortion Act was introduced, there were no such cautious projects. The provinces were just told to implement it and sort out their own problems in their own way.

There was no reason whatsoever not to introduce the HIV screening of all pregnant mothers in the same way. The Department of Health has already said that it is not the effectiveness of Nevirapine that is being tested merely those “operational issues”. This only gives the health department more breathing space to save money while it thinks of new delaying tactics. It will also be less displeasing to the president. Costa Gazi, health representative, Pan Africanist Congress of Azania

Back to square one

Robert Kirby’s view of the puke-inducing exploitation of a dying child for purposes of hobbyhorse-riding, political correctness and personal ambition cannot but be applauded (“Mad Sacred Cow Disease”, January 26 to February 1).

He starts his column with a reference to Malegapuru Makgoba’s angry accusations of cynicism. He doesn’t examine Makgoba’s rationale, though.

When first I read the headline of Makgoba’s article the week before, I was gobsmacked: at last here was something that I could agree with Malegapuru about.

But, no such luck. His objection (with which I heartily concur) was based on nothing more than a further manifestation of the boot-licking and face-saving highlighted in your editorial (“The politics of saving face”, January 26 to February 1) and Zapiro’s brilliant parody on Thabo Mbeki’s presidential organogram.

So, its back to square one with Malegapuru. Bruce MacDonald, Rondebosch

Jock was not a bull terrier

About 50 years ago the argument about Jock of the Bushveld being a staffie or a bull terrier drew quite a lot of interest. I was involved in the argument, which in any case was quite absurd. From the description of Jock’s mother Jess, she certainly was not a bull terrier, and according to Ted (her owner) his father was a “yellow” dog and pure bred.

That they were pure-bred of any of the two breeds seems very doubtful. Both breeds origi-nated from the old English bulldog. In drawings, we see a very mobile and powerful animal used for bull baiting and quite unlike the present breed.

From what I remember, a man by the name of Hinks crossed the old English bulldog with the English white terrier to originate the bull terrier. And the bull terrier of those days had, from pictures and photos, a much coarser head than the present “egg”-shaped head. Or I think the expression was “filled in”.

I believe the staffie was bred down from the original old English bulldog.

I had the original book by Sir Percy Fitzpatrick and knew it off by heart some 75 years ago. I am 80 now.

I had the pleasure of a visit from Pat Niven many years ago, who lived somewhere near the Fish river and whose grandmother was a Fitzpatrick and very much involved with the legend of Jock. I enjoyed the discussions very much.

I am sure Niven would know more than anyone about Jock. H G (Tubby) Lynn

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