To my mind
THE SUGGESTION BY a Government, business and labour task team to curtail the import of cheap goods smacks of protectionism – despite solemn undertakings to strive to keep within the World Trade Organisation’s rules of free trade. In his State of the Nation address, President Kgalema Motlanthe paved the way for such restrictive measures when he elaborated on steps to try and soften the impact of the current economic downturn.
Alternatives to lay-offs will be explored, like the promotion of the “Proudly South African” campaign and stronger action on illegal imports, Motlanthe said.
The aforementioned campaign, which artificially encourages buying South African-produced goods, bears a striking resemblance to the protectionist specifications included by United States President Barack Obama in his US$787bn economic stimulus plan, billions of which have been earmarked for public construction projects – on the condition that only US steel and other US-produced goods are used.
Those specifications by the new US President were met by vocal concerns on the part of representatives of the G7 industrial nations about the potential danger of any distortions of free trade at a recent meeting in Rome.
Delegates pointed out that just like the damaging protectionism of the Great Depression of the Thirties when countries closed their borders to free trade, such measures may stunt economic growth.
Our concerns are to some extent assuaged by the knowledge that leaders of the world’s leading industrial nations seem to learn from (some) mistakes of the past. Unfortunately, it also seems as if our own wide-eyed leaders are set to fall into the protectionist trap, apparently oblivious of the failure of the ban on clothing and textile imports from China.
The world economy has already been turned on its head by the nationalisation of banks in the US and Britain – a blow to the very heart of a free market economy. It’s not yet by any means clear how the financial dispensation of the world’s most prominent countries is going to return to normal.
However, it is clear prescriptive and restrictive measures aren’t going to help stimulate struggling economies. Not Obama’s Buy American campaign or French President Nicholas Sarkozy’s threats to bring car factories from the Czech Republic back to France. Or denying South African consumers the choice to buy cheap Chinese clothes and forcing them to only be proud South African buyers. IN ORDER TO overcome SA’s serious skills shortage, the enormous education backlog must be eliminated. As a contribution to the debate on how that can be achieved, Finweek commissioned pioneering research on the state of tertiary education. The results have been processed and are being published in a supplement together with this issue, in which the methodology and findings of our research are set out.
We plan to repeat this research each year so that those findings can become an essential aid for tertiary institutions to measure their progress. Feedback from readers on the methodology and findings of this first survey will help us to further refine this tool.