Are we on the road to a savage future?
Disintermediation usually advances society, but not always. A (now highly developed) informal lending market has emerged in SA.
Partly this is in response to the absence of supply of credit to “informal” sectors of the economy by the established commercial banks, and partly it is due to advances in technology. Access to financial services and transaction capability is now on your person, in your pocket, 24-7, for so many.
I’m not sure that in its current form (particularly as it relates to pricing) these developments are all virtuous and sustainable. Expensive (practically unaffordable) credit is ultimately a destroyer, not an enabler.
Disintermediation of banks is likely to continue though, even at a faster pace, throughout the world. The systems and interfaces that replace them are bound to settle where equilibrium is found at the intersection of demand and supply.
SA has different influences and will require special attention. Disintermediation at a far more sinister level is taking place in the contracts, capital and cash flows that underpin economic activity in this country.
At the outset of systemic corruption in SA the source, as it related to government expenditure, was with (flawed) tender rules. To be sure, the private sector has, and always has had, its share of the corruption pie, but state-led corruption was enabled by the rules and the rulers, not despite them.
Well, that was just stage one. That was when the government was still in control. That was when political power ensured purse-string control. That was when deployed cadres made the rules and handed out the dosh. We have moved on from Corruption 101.
The first tier of participating thugs have all grown up now — with sufficient capital and infrastructure to do this on a grand scale — without the acquiescence of government. The spoils are shared between the power players and the split is determined by relative force.
It should therefore come as no surprise that we were greylisted, and don’t hold your breath for that status to be lifted. Foreign capital has choice, and net foreign capital transactions show a concerning, if not alarming, rate of exit.
Local capital, albeit sometimes restricted, is no different. However, beyond these measured flows an increasing illicit economy is developing, with dire consequences for tax revenue and GDP growth generally.
The real issue is that there are no records, no boundaries, no laws, not even understood practices, to fall back on in this underworld. Such is the nature of anarchy. We’ll never know the true extent of it all.
As power shifts from government structures at all levels (central, provincial and local) into the streets, where gangs rule and violence is the exchange rate, it becomes personally, dangerous to “interfere” in this ecosystem.
We see some of it on television and Twitter, but there is horror happening on the ground beyond any civilised person’s understanding, comprehension or ability to cope. People join gangs as a survival strategy. You don’t want to be on the other side of the force that rules in your neighbourhood.
If we, the general population of good people in SA, let this slide much further I’m not sure there will ever be a solution. At some point we’ll be just too far gone to come back. A new normal will manifest, and we’ll just accept it. We’ll cower in our bubbles and survive limited lives, within limited safe places, in an ecosystem of such bubbles floating precariously on a sea of atrocities.
Nobody wins, not even the bad guys. There’s always someone even crazier and more savage out there who can bring you down. The resources will eventually run out and the fight for primal needs will get more vicious — depravity knows no bounds. The knives will be more blunt, but the cuts will be deeper.
Of course, I’m just speculating. We’ll be fine, right?