Why South Africa Will Not See an Economic Miracle (and why you are on your own and need to help yourself)

Today we are looking at why South Africa will not see an economic miracle to lift the masses out of poverty, and why it is up to the individual (YOU) to help and better yourself.

South Africa’s economy is in the doldrums, it is very similar to South Korea after the Korean War and Germany after World War 2. Both these countries saw “economic miracles” Miracle on the Han RiverWirtschaftswunder (Miracle on the Rhine) to describe their country’s rapid descent from the gutters into global superpowers.

Mandi Smallhorne wrote an excellent article about how South Korea rose from the ashes about how the country was living in poverty just 50 years ago (they were poorer than North Korea) to become the prosperous industrial powerhouse they are today. As well as the positive effect their government had on nurturing the economy. The takeaway: “(the state) provided subsidies to manufacturers so they could grow, find stability and firm up their product offerings without the eternal pressure to be profitable within a year or so.” Besides their government subsidies, their state-owned companies also assisted, can you imagine if Transnet rail could sort their shit out? We will have a national rail freight network, where we can move heavy goods across the country opening up economic opportunities (there is a national rail network and train station is almost every town). South Korea also had a good education system (another place we are lacking).

One of the most poignant stories to come out of this is that of Chung Ju-yung, the founder of Hyundai, who went from peasant boy to billionaire, the Guardian said it best he “personified his country’s ascent from poverty to global success”. Whenever his success is brought up in an impartial manner there is a little footnote, about how he had state help and benefitted from soft loans (cheap credit) from the government.

Be that as it may that Samsung, LG, and Hyundai had state help to get where they are today. But how many hundreds of billions have the South African government and the PIC (Africa’s biggest fund manager) wasted on investing in “entrepreneurs” but have nothing to show for it? No taxable income, no jobs created and the money was never paid back. That is because the only skills these entrepreneurs had (and I use the term “entrepreneur” very loosely here) is political connections.

The majority of South Africans or should I say the black community have been led to believe that BEE means “black economic empowerment” (the Guptas are lighter-skinned than me and I am like a slice of bread toasted using the number 2 setting on a toaster).  It does not, not on the lower end (where they make up the minimum wage positions which is not surprising they are 8 out of every 10 people in SA) and not on the upper end. In order to get money, help or anything fast from the government or PIC you need to have connections, but any foreign company that comes here knows this, so they only partner with people with political connections. Someone that can access government assistance, contracts or make a phone call to fast track a permit. If you are a nobody you are of no use to anybody regardless of your skin colour. That is why you see some comrades with 50 board seats and 100 directorships. So the money is just kept among these people. They don’t start businesses (many of them don’t know how), they don’t add any value.

That is why whatever may be said about Chung Ju-yung he built Hyundai into 86 companies (including Hyundai Heavy Industries the world’s largest shipbuilding company).  When his dockyard was too small to build a ship for a client, he built the ship in two halves, when the two parts would not fit together he welded it together and set up a shipping business to use the vessel – Hyundai Merchant Marine (now called HMM) the world’s 8th largest container line in terms of vessel capacity (2019 revenue: $4.7 billion) and still went on to build the clients ship afterwards. Yes, it hasn’t always been smooth sailing for Hyundai, but show me a comrade that is this resourceful in SA (the ANC’s biggest success story is a junior miner).

How to fail
In South Africa probably the biggest weakness is that people don’t want to help themselves, the vast majority have become dependant on the state for assistance no matter how bad or slow that assistance is. And the state has been all but willing to offer a comforting teat to maintain the democratic advantage because they know their voter base so well (there is now even talk of a pregnancy grant for poor people).

There are people that sit on the government housing “waiting list” for 30, 40, 50 years, and they wait for the government to give them a house. Not once in that many decades did they not sit down and think, “I am going to buy my own house”, I’m going to try, set a goal.

Why you need to help yourself
The fact of the matter is this: the government don’t have the money to help people, and I’m not talking about all the money lost to corruption. We just have too few people working. If you live in a house with 10 people and only one is working, that person has 9 ectra mouths to feed on his salary. Unless he makes a lot of money, it just doesn’t work. No different on a macro level when it comes to countries. Right now in South Africa there just aren’t enough taxpayers to sustain the country. And not even the slay queens will be spared because SARS is even coming for their OnlyFans money next to pay for all the grants they dole out.

So what does the future hold for South Africa’s economy? It will continue to meander around its current levels, increasing slightly then flail again, while maintaining its world-leading unemployment rate.

Let me be clear, if you depend on the government to help you, you are in trouble. The rising tide is not coming, you have to float your own boat. Only the people that want to help themselves will get out of poverty and they will. Mark my words.

Image credit: CNET