GOLDMAN STATS
20 years of hits and misses
GOLDMAN Sachs recently released a sterling work of fiction titled Two Decades of Freedom — A 20-year Review of South Africa.
Although the foreword is attributed to Colin Coleman, the report reads as if it was knocked together by Mac Maharaj during a day at the spa. Here’s why it could end up being lethal.
If the report were adapted into a corporate video it would open with a slow pan of giraffes browsing on the savannah, followed by images of a multiethnic children’s choir singing Shosholoza.
To anyone who has spent more than four minutes in this country not stoned on magic mushrooms, the tone of the report seems weird, the numbers so wildly spun that it resembles a Lotto raffle — and guess what, we’re all winners!
Why, one wonders, did the planet’s biggest money shop go all gooey on “Nelson Mandela’s South Africa” when a solidly researched, unbiased report might have smacked our government out of its complacency?
But the report officially goes off the rails just a few sentences later: “This fact [the part about South Africa being “even more African”] dominates the political and commercial landscape and makes the African community the key determinant of the political and economic life of the country”. Sorry, the “African community”?
Suddenly, thanks to Goldman Sachs, 45 million black South Africans represent a solid bloc, unified in determining “the political and economic life of the country”? The uninitiated reading this in a cab en route to a Wall Street office now owns a mightily skewed portrait of this country.
The good news is that Goldman Sachs — the sturdiest pillar of gloves-off capitalism the world has ever known — have revealed themselves as champions of the poor, as Marxists with a cheque book.
“The poor”, bleats the document, “have benefited from cash and non-cash state transfers”. Goldman CEO Lloyd Blankfein would assassinate any US president who instituted “cash transfers” to America’s poor, but South Africa should appreciate Goldman’s cultural sensitivity in this regard.
It gets worse. For instance, what the hell does this mean? “While unemployment has remained high with a net 900 000 added to the unemployed in 20 years, those with employment have in fact grown by 4.1 million in the period. Employment has therefore grown, albeit at an insufficient rate to bring the aggregate percentage unemployed down.”
Goldman wants us to believe that while there is no change in the unemployment percentage, there are more actual people working.
On page 3 we get the cracking “Service delivery has improved since 2002”, which quotes entirely from a Stats SA 2012 General Household Survey. And yes, according to Stats SA, service delivery has improved. But service delivery is, of course, the single largest flash point in this country — a fact, you’ll be unsurprised to learn, that goes virtually ignored in this report.
In every respect but one, the Goldman report gets a failing grade. And the one respect in which it passes with flying colours? It’s a supremely canny piece of advertising.
The real question, of course, is whether a report blathering on about how things have improved since 1994 is worth anything to anybody? Of course, things have improved: we’re living in a country that isn’t ruled by white supremacist geriatrics, one that is governed by some of the most glorious and progressive legislation anywhere in the world.
But doing before and after comparisons is pointless.
Our competition is not ourselves 20 years ago. It’s everybody else, right now. And it’s not about how we felt 20 years ago. It’s how we feel right now.
Why is Goldman Sachs bothering with all the spin? Very simply, Goldman, like many US investment firms, are now in the business of selling emerging markets. They’ve wised up to the fact that the Africa Rising narrative serves their interests, and they will therefore bust their asses crafting nonsense reports to “educate” their jittery (but credulous) client base.
The tragedy is that the story of Africa’s rampant growth has been hijacked by those who seek to profit from it, and in profiting don’t care if they destroy it.
The ANC released a fawning press release: “[The Goldman Sachs] report makes an incisive assessment of the successes and challenges that have characterised South African society since the advent of democracy.”
What’s next — Jacob Zuma becoming head compound-building consultant for JPMorgan Chase?
I’m not sure that I have ever read a financial report so willing to engage in numerical gymnastics as this one. We’re being used, folks. We’re being played like party-favour ukuleles. Goldman will make money by betting against their clients betting on South Africa. That’s how they roll.
The report is a commercial for the emerging market story Goldman are currently selling. And one way or another, we’re going to pay for it. Can’t win with these guys. Impossible. But boy, can you ever lose.
Used with permission from Daily Maverick