Thursday, March 19, 2009

Open letter to Trevor Manuel, Minister of Finance, South Africa

Dear mr Manuel
I just would like to make some comments on your remarks about South Africa's reliance on commodities and the role of entrepreneurs:

1. Entrepreneurs, the name says it all, take risks. They take these risks in return for the prospect of excitement and money. Money is not the only object, there are also expectations of a positive future, a safe environment to work and live in and as a result a good life style. After all, what can you do with a lot of money in a prison!

In short, if you and your ministerial team create a positive future for us, I promise entrepreneurs will take the risk.

2. Entrepreneurs are educated people. That does not mean to say that they have all had a university education, but all of them are street wise and have a high social intelligence. They observe and reason. They think about the now and the future. They go out and confront people in a positive way. But to be educated you need help. You need confidence. This you get from your parents and your education. If you and your team create an environment of education, I promise you this will create many more willing entrepreneurs .

3. Entrepreneurs need freedom. Constant interference by (semi) state organisation chokes the initiative. I understand the government wants to create a just and equal society. But the yearning towards equality clashes with the objective of the entrepreneur. However, give the entrepreneur the incentive to work with the government towards a better society, I promise you the future will look very different.

4. Entrepreneurs need the opportunity. South Africa is recovering from a post-war (apartheid) economy in which concentration of economic activities was a necessity. From Banana Board to minimum price setting in for example the wine industry. In this nasty era, businesses were protected by law. The result: the entrepreneur takes the first one-way ticket to another destination. So we're more or less stuck with a thinking that if there is a problem, people first look if the government can legislate the problem away. More legislation is more bureaucracy. After all, government organisations need to justify their existence? Big Business support this legislation most of the time as it is in their interest to remain in control. And we, the entrepreneurs, are left by the wayside. There has been some loosening up in industries for the last 19 years, but hardly enough. The government cannot legislate everything. Let go! Leave the market alone! Observe and have an expert organisation oversee the industry. That's all! Stop protecting big business. If the government steps back, I promise you, entrepreneurs will flourish.

What we are asking for as entrepreneurs is for you to take action in the fields I just mentioned. We understand this is sometimes is a political choice, but if you would like our commitment and loyalty you have it. Just give us space, freedom, less interference, education and opportunity.

Kind regards
Troy Ounce

UPDATE March 2011: Nothing has changed. The ANC is still hugging the poor. More legislation is in place or coming "to protect" the innocent: National Credit Act, Liquor Act, BEE, Consumer Protection Act, etc. The (well-meant) protection of the poor and innocent will lead to unsustainable unemployment figures, bigger government to oversee the hundreds of laws and lower GDP growth. The government really cannot do better.Apparently they have no idea!
The route they are taking is wrong, of course, but apparently they can only parrot each other. The solution is: SMALLER government, stimulation of entrepreneurship, abolishment of useless laws and EDUCATION of the innocent and poor to understand what THEIR problem is. But hey, we're talking about a democracy, voters and frineds in high places with big salaries. would you change course if you were them?

Manuel urges business to end SA’s reliance on commodities
Business Day, Wilson Johwa, March 19, 2009
BREAKING SA’s dependence on commodity exports required enterprise and innovation — skills that are in short supply in SA, Finance Minister Trevor Manuel conceded last night.
Singling out platinum production, which has not been spared by the global economic downturn, Manuel said there had been inadequate research and development in SA.
The country, which has the world’s largest platinum deposits, “has not progressed much beyond commodity exports”.
“We must diversify. But that is up to the entrepreneurs.
“Our problem is that this requires entrepreneurship. Governments are bad at producing entrepreneurs,” Manuel said at an event aimed at selling the African National Congress (ANC) election manifesto to black business.
Thousand of jobs in the mining industry are on the line as a downturn in the global economy has slashed demand for South African metal exports and as prices have declined.
Manuel played up the party’s achievements, saying, “As we are proud of our history we are confident of our future.”
He said much of SA’s role in helping Zimbabwe was in convincing richer countries to commit resources. Already, Australia, the UK and Norway had made such pledges. “The country needs help,” he said.
On the settlement of government bills, Manuel emphasised that the law specified that invoices must be paid within 30 days.
“We must ensure that we uphold the law everywhere,” he said.
Defending inflation targeting, he said price stability was in the interests of working people.
However, Manuel criticised the present funding model in which the SABC was assured of 65% state support without requiring a high level of accountability from the corporation.
He said despite having the biggest antiretroviral drug roll-out, SA had not succeeded in effecting behaviour change, hence the infection rate remained high while teenage pregnancies were increasing.
Manuel did not answer a question about whether the government had concrete plans to help companies struggling because of the international downturn.
The government had previously said it would use state-owned development financial institutions to help sectors battered by the downturn.
In his budget speech in February, Manuel committed about R780bn in infrastructure spending to help boost the economy, shifting the budget to a deficit for the first time in three years.
When asked about the deficit he said, “It’s not the size that matters... you can run it up but that does not help anybody.
“You are impoverishing this gen-eration and the coming generation.” With Reuters

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