Oct 29, 2009
Johannesburg: There was lots
of skepticism when I came to South Africa two years ago to show my film
IN DEBT WE TRUST. While my critique of consumer debt resonated, the
film's forecast of a financial crisis didn't. Their economy seemed
to be doing well and it was hard to tell a society that tends to look
inward that they would be affected by a financial crisis in America,
l0,000 miles away.
Most believed it would pass
It hasn't. A year ago, the
International Monetary Fund warned that 200,000 people would be affected.
People living on $2 a day might end up surviving on $1 or not surviving
at all. These victims around the world are mostly not part of the US
debate or our media coverage. The faces and stories of these victims
are as conspicuous by their absence as have been stories of the
one million families that had their homes foreclosed upon in the last
As if South Africa doesn't
have enough problems -- the AIDS pandemic, massive poverty, and simmering
unrest, the Finance Minister yesterday discussed the impact that the
global economic crisis is having. There's been a loss of 500,000 jobs
and a fall off of taxes and an increase in expenditures.
The projected deficit will
soar with a shortfall doubling to 7.6% of GDP. The government
has to cut costs; that will mean a further cutback in social services
at the very time of growing protests against service failures and neglect
of the poor. South Africa will now be forced to go deeper into debt,
to borrow more money
Thank you Wall Street -- although
most of the media I saw here did not blame forces/financial criminals
in the USA for causing this financial cancer. Perhaps they are too far
away for most polilticans and pundits here to see the connection.
I did read about a big South African bank that got stuck with sleazy
subprime losses sold by US firms but that is not being raised in connection
with this emerging economic catastrophe.
They even have their own Ponzi
schemers here. The government has issued arrest warrants for two scammers
pushing phony investments in AIDS drugs. Several big companies are being
prosecuted for pice fixing on commodities like bread and paraffin or
This crisis has already led
to an escalation of protests in municipalities against service cutbacks.
At least one TV show here, The BIG DEBATE on ETV, produced by Ben Cashdan,
is showcasing the real issues and generating lots of heat and light
on financial issues. (www.mybigdebate.com).
The debate raises deeper issues
of transformation -- something we in America should learn from.
President Obama has used that "T" word as did President Mandela
whose campaign promised "A Better Life for All" back in l994. For
many, conditions are worse as a new black elite enriches itself.
The ANC still calls for deep
change but it, too, is up against many of the same forces Obama faces -- a
mostly white business order that has not made many sacrifices
while promoting neo-liberal economic policies that sustain a status
quo built on inequality.
While race may be more explicit
an issue here in a country still coping with its Apartheid past, class
is becoming as deep a divide.
This is not just a fight between
black and white anymore -- if it ever really was -- but between the ideas
and proposals of the left and the right. There is an active Communist
Party, with many activists to the left of it, that is allied with the
Government and pushing it. There are also well organized unions that
are advocating for the interests of the workers, many who are now out
of work. They too are fighting for a new health care system, preferring
a more socialized model.
The government officials want
to placate this constituency. They talk left with the new president
Jacob Zuma calling for a "shift to the left in economic policy"
while at the same time focusing on reducing wasteful expenditures and
reorganizing public spending, fixing the tax base and other centrist
reforms. There are no fewer than four Ministers involved in economic
Listen to how Business Report,
a national financial daily, analyzed the new Finance Minister Pravin
Gorham's speech to Parliament with the bad news on the economy. "Pravin
Gordham managed to perform an egg dance, neither projecting himself
as left-wing nor centrist during his first medium-term, budget policy
His focus is on "pragmatism."
Sound familiar? Egg dances can be dangerous. Remember Humpty Dumpty?
Bond offered a sharp critique.
"I just can't get over the
disappointment at the speech Pravin Gordhan gave yesterday. The most
telling point is that notwithstanding unrelated financial market flurries
yesterday, capital was quite satisfied with the speech, judging by some
of the comments I heard on radio talk shows.
I think the civ soc watchdoggers
immediately below missed a couple of crucial points: first, it is now
quite apparent that Gordhan is not going to fund the NHI (NATIONAL HEALTH
INSURANCE), based on the inadequate health budget increases through
2012; and believe it or not, after railing against global capital and
SA's rich -- and belatedly prosecuting financial pyramids after the damage
is done -- Gordhan has the nerve to loosen exchange controls substantially!
Sure the budget deficit -- 7.6% of GDP -- is vast, double what (Former
Finance Minister Trevor) Manuel estimated six months ago... but that's
mainly due to falling tax revenues, while on these crucial struggle
sites like monetary/financial policy and NHI, the news is very very
bad for the left...
Sadly, the vast declines in
manufacturing and the need to generate a more environmentally-sensitive
and locally-oriented economy are ignored. What a waste of a peaceful
coup, when just 13 months ago and then in May, it looked like many processes
were open to change. How naive!" ('Naive'? Could the same be said
Meanwhile, the perceptions
of corruption at the top are everywhere. Even Trevor Manuel, considered
by business as the most competent official on economic matters is being
challenged for buying a top of the line BMW at government expense. He
says now that it was "ill advised" but is "within Ministerial
guidelines" and he will not give it back. Another Minister who is
the head of the Communist Party was earlier exposed for driving a Mercedes.
What started as empowerment is now being seen as enrichment.
The prognosis: More and sharper
conflict as this debate takes to the streets.
It is time for our media to
start explaining the international impact of the irresponsible and fraudulent
practices pursued by Wall Street's banksters. We may not be the world,
but what happens in the USA affects and infects the whole planet.
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