Let's Think

South Africa mirrors a world in trouble

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Caught-up in so much present turbulence on its domestic political-, economic- and social environments, South Africans often miss to what extent it mirrors global trends of a world in trouble.

Some commentators, often probably inspired by a political/ideological bias, finger South Africa as the ‘most unequal society in the world. What remains mostly unsaid, however, is that inequality has become an acute global problem, and a threat to stability in countries across the globe.

A sobering picture in this regard emerges from a report on a recent three-yearly meeting of all Nobel Prize winners in economics. The meeting became dominated by the question of what’s to be done about inequality globally. And, it is not just about inequality between so-called rich and poor, or developed and developing/poor countries.

In fact, 2007 Nobel laureate, Eric Maskin, highlighted the paradox that while globally inequality between countries was narrowing, inequality within developing countries was increasing. In this trend, the United States and the United Kingdom are leading the pack, with inequality growing faster than in other Western democracies.

However, also in this regard, one should be careful with over generalising. The shrinking of the average inequality gap between developed- and developing countries, for instance, can mainly be ascribed to the rapid economic growth of China and India.

It should also be kept in mind that the South African population, for instance, has both a ‘first-, and developing world’ component.’ This bring about some social pressures of its own.

Also read: Inequality troubling world’s top economists

From the discussion, and ideas that came forward, at the meeting of the economics fundi’s, it was clear that the answer to this problem is no simple matter. And some of the ideas, like a universal basic income (UIB), is to our mind an over simplified attempt at a one-fits-all solution.

However, as South African citizen-power has already indicated one some fronts, transparency, or uncovering of root causes of ills, can go a long way towards fixing problem areas.

In this regard, there might be something to learn from UK Prime Minister, Theresa May’s plans to force listed companies to publish the ratio between the pay of chief executives and average for employees. One should keep your eye on how that one plays out.

Other fronts

It is not only on the inequality front that South Africa seems to be a mirror of what is happening on the global stage. Just think of how, in many ways South Africa has in recent times held up that mirror to other countries of the world.

Consider, for example, the multi-national corporations which helped facilitate domestic corruption and unethical conduct – be it Bell Pottinger, or the auditors we depend on to protect us against schemers, like KPMG.

And, as we are watching the unfolding domestic drama of corruption and money laundering surrounding the Gupta family, Australia’s biggest commercial bank, the Commonwealth Bank of Australia, has just become the subject of an investigation regarding alleged breaching anti-money laundering legislation, lack of accountability and  "serious and systemic non-compliance" with the law more than 50 000 times.

This investigation of Australia’s biggest company by market capitalisation follows on a series of recent scandals over poor financial planning advice, insurance pay-outs, and now allegations of money laundering.

Also read: Gupta-related events damage SA’s financial sector image

And, disillusionment in South Africa with present political leadership, is also not an isolated phenomenon. It is well pointed out in an article by Ian Kilbride  in BizNews, under the headline: “Dubious, lowball politicians not just a South African affliction.”

After looking at North Korea’s Kim Jong U (“a spoiled rich brat”), the US’s Donald Trump (“another trust fund baby”), and the UK’s Theresa May, - “an ice lady” who could barely survive a vote in her own party, let alone a secret ballot in the Commons, Kilbride concludes that Jacob Zuma (“… a self-styled Zulu chieftain”) … may actually have more personality and political savvy than all the others put together.”

As we argued before in this column, and in other articles, in terms of the structured political-, economic-, and social life, the present world order is set for change comparable with the end of feudalism.

Alec Hog of BizNews probably hit the nail on the head when he recently wrote: “South Africans often think it just happens to them, but the reality is we live in a time when the whole world is taking two steps forward and then one step back. Best be prepared. Because it’s going to be a rocky ride.”

by Piet Coetzer

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