THE state is continuing to seek ways of ameliorating possible future job losses which may or may not result from Walmart’s investment in Massmart.
It would like the R100m set aside for this purpose increased to R300m. This newspaper has in the past questioned the wisdom of the state taking its own regulatory authority to court because this will make South Africa even less of a global destination for real investment.
But there is a secondary effect which this tinkering will cause — the distortion of the business environment for retail.
Just last month Pick n Pay — a direct competitor of Walmart’s — announced it was cutting 3000 jobs without a murmur of dissent from government.
There was no demand for the creation of a fund to ameliorate the results of this decision. Apparently job shedding by wholesome South African companies is not frowned on by the anti-imperialist lobby.
What this in effect means is that Walmart is paying a penalty for a possible future transgression while actual job-shedding goes unpunished.
No company should make a decision to shed jobs lightly and the state is entitled to ask serious questions when thousands are to lose their jobs.
But legislating against this or imposing fines in anticipation of it happening is not the way forward. All this does is make South Africa’s labour market less competitive, causing us to lose out on the jobs that further foreign investment would bring.
Distorting the market with piecemeal interventions smacks of ignorance and arrogance.
*This is a draft leader for the Sunday Times
THE news from electricity provider Eskom continues to veer from the bizarre to the concerning.
Bizarre is the utilities suggestion to Parliament that South Africa be split into two time zones, a move that will create a lot of organisation chaos and very little electricity saving.
After all, people switch their lights on when it gets dark, not when the clock strikes seven o’clock.
The idea of two time zones has been flighted before, investigated and found to be inappropriate for a country of South Africa’s size.
More concerning is the utility’s announcement that the construction of anything larger than a house is going to be delayed and subjected to a new application procedure to establish whether or not there is sufficient power.
It goes without saying that this will put a major dampener on new development and strain one of the best performing sectors of the South African economy.
What is more disturbing is what Eskom is not announcing. It is not telling us how it intends to bring the discipline of the market to bear on the supply and consumption of electricity.
It is not explaining how it plans to move away from the archaic ideology of state planning towards a more efficient system of distributing its scarce product.
South Africa’s failure to provide sufficient electricity is an illustration of the failure of state planning in a modern economy – nothing more, nothing less.
This much is certain: If it paid the private sector to produce and distribute electricity, there would be no shortage.
By sticking to its pre-Gorbachev notion that public utilities can only be managed by public officials, government is making the economy a victim of serious inefficiency.
The production and supply of electricity must be privatised. This is the only way to ensure demand is met by supply.