To my mind

Finweek English Edition - - Front Page - COLLEEN NAUDÉ

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.

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