LETTERS TO THE EDITOR Stokvels can fight debt

Lies and spies old mates

Former president Jacob Zuma has stated in his evidence that former cabinet ministers, Ramatlhodi and Siphiwe Nyanda, were apartheidera spies. Over the past 25 years in postapartheid SA, among more than 50 top politicians called apartheid-era spies, not a single person was ever unmasked as one.

We are constantly reminded that those opposing the government are CIA and Western agents. This keeps rocking the SA political establishment. The architects of these allegations, have probably read Sun Tzu’s book, ’The art of war‘ in which he states that, “All war is based on deception.”

According to a study, lies told for political purposes continue to influence people after they have been debunked, and in some instances the lies are made more credible (in the minds of those predisposed to the message) by the debunking.

No doubt given the nature and scope of intelligence, everyday morals cannot be exactly applied in this profession. The perception that ethics have no role in intelligence work can be seen from the remarks of US Judge Richard Posner, an astute observer of national security affairs: “Intelligence is the second-oldest profession, only with fewer morals”.

Amid the cascading disclosures involving these spy allegations, it is evident that the information being spilled is obviously wrong. But a lie can get halfway round the world before the truth gets its boots on. History teaches us that if you tell a lie big enough and often enough it shall be believed as truth.

Rumours and innuendo have long influenced the conduct of politics. With the rise of the 24hour news cycle and rapid communication, the potential for the spread of false information through rumour is perhaps greater than any time in our history. It was George Orwell who said: “Political language is designed to make lies sound truthful and murder respectable and to give an appearance of solidity to pure mind.”

Farouk Araie Johannesburg.

Masondo gets it right

We have read with great interest and appreciation the broad comments by deputy finance minister David Masondo in an interview with Business Day on July 4. While some may feel parts of his comments are controversial – such as those on monetary policy – we nevertheless welcome his frank views on politically sensitive issues, indicating there is still scope for discussing difficult choices without being labelled as dogmatists.

It was refreshing to have a contribution that got to the substance of the policy matters at hand from someone who clearly possesses a serious intellect. We should continue in this vein, insisting on separating the substantive policy debate from politicking and alarmism.

We do not wish to get entangled in the debate on the Reserve Bank except to say a recognition of the independence of the Bank does not preclude proper consultation with the Treasury. Fiscal and monetary policy must work in tandem.

We particularly welcome Masondo’s comments on the need for a developmental state. We are reminded daily that SA is a developing country with huge numbers living in desperate conditions. These conditions are not being improved significantly by welfare payments and it may be that over the years we have lost some focus on development in favour of welfare spending. While welfare is necessary, we need a primary focus on development spending.

It is abundantly clear that poverty and unemployment can only be overcome by deliberate interventions by the state to draw people into economic activity. Investment itself, however, will not lead to redistribution. We have to develop redistributive fiscal mechanisms that ensure not only the wealthy benefit from such investment, and here social policy can play a role.

We also agree that a priority is to encourage investment to boost demand for employment to grow. This applies to both the state and the private sector. The challenge, however, is to identify by what means this is to be achieved and where such investment should be directed so that it serves the majority of our people. There is ample room for debate on this now.

We need to consider providing meaningful stimulus to grow the economy using all available instruments, in the spirit of the developmental state. This can be done responsibly and within the bounds of our fiscal position along with other market realities, and in this effort monetary policy too has a role, as Masondo has alluded to, albeit not in isolation from other policy interventions.

There are some prospects that the government, business, labour and civil society can find common ground here and we, the undersigned, offer our support.

Professor Ben Turok and 16 other university professors and economic researchers

Via e-mail

What jobs minister can do

It is good to see that the minister of employment & labour is going to try to persuade offenders as opposed to threatening them.

The minister, who is newly appointed, has at least recognised that the results of our system, including our labour laws, have been massive job destruction.

It would be wise for the minister to recognise as well that it cannot be business as usual.

There is obviously a lot wrong with the regulatory environment when the perception of the small business community is so negative that it is refusing to create jobs. Furthermore, the minister has stated ” a partnership is needed between the state and the private sector in creating jobs”.

What would be a lot more relevant is that the minister needs to take a jaundiced and careful look at the destructive regulations penned by his predecessor, Mildred Oliphant.

First, the extension of bargaining council agreements must be stopped immediately. This destructive environment acts as a handbrake on job creation in the small business sector.

Second, the exemption regulations for the national minimum wage are onerous, tedious and complicated. Over and above this, the regulation only allows for a 10% discount as opposed to real exemptions for deserving cases.

Third, the broad-based BEE environment is so skewed that the results are benefiting just a few at the top and destroying small business.

Fourth, our immigration policies made it almost impossible for scarce skills to be imported into the country. A scarce skill could come here on condition that they train South Africans to perform the necessary job.

There could also be an undertaking from the employers that for every scarce skill brought in they would employ another three people to be trained.

Michael Bagraim, MP Via e-mail To say the SA consumers are drowning in debt is an understatement. This comes when July is supposed to be the National Savings Month.

Ironically, July is a month when municipalities increase municipal services like electricity and water way above the inflation, thus further squeezing the consumer. The Reserve Bank puts the national debt at over a whopping R1.73-trillion.

The SA Saving Institute (Sasi) recently launched the national savings campaign on social media; which is aimed at encouraging young people to start saving. According to Sasi, about 20-million people aged between 15 and 34 are increasingly relying on credit and are overindebted. Most households spend more than 70% of their household income servicing existing debt.

Consumers are encouraged to share their creative ways of saving on social media. Not surprisingly, though, the campaign failed to get near trending status on social media. This is because the big four banks have over the years never bothered to come to the party.

The same energy which the banks use to hound consumers to get secure and unsecured loans, they should use to encourage people to buy savings products. They should take responsibility and play a leading role to educate consumers about affordable savings and investment products. This is because the statistics show that consumers are continuing to borrow just to sustain their spending; and also the fact that mortgage advances, general loans and advances account for the largest component of household debt.

Given the fact that most of the households which are caught in a debt-trap are previously disadvantaged, it’s time the government seriously considers establishing a state-owned bank linked to communal banks. This could be one way of changing the structure of the country’s banking sector. This would go a long way to also give the marginalised communities ownership and access to financial services like insurance companies.

Presently, there are no incentives for people to save the money with the banks, as they are servicing high interest rates. The National Stokvel Association of SA estimates the stokvel economy to be worth about R49bn with more than 800,000 stokvels. This is a powerful savings tool which the state bank could tap into; and incentivise more South Africans to start saving by offering attractive interests and access to funding.

Despite the economic hardships and high rate of unemployment, the stokvel model has shown that people strive to save the little they have.

Vuyolwethu Zungula MP and President of African Transformation Movement