Publications
Partners
Much has been written and said about the apparent “watershed” elective conference of the governing ANC this weekend.
Whatever happens, whether the conference collapses prematurely or ends in calumny or consensus, life will probably go on much the same as before.
The exchange rate value of the rand may weaken, or strengthen, as the money market gamblers win or lose their bets.
And, with an 18%-plus increase in the price of electricity looming, tougher times lie ahead for many.
The lot of the already battered majority of the population is unlikely to improve.
But despite the gloom, there are flickers of hope, evidence of a growing push to fight back.
Civic groups are starting to coalesce and demand changes to a corrupt system that continues to favour the rich at the expense of the poor.
Even the much-publicised Steinhoff collapse may help this cause.
Steinhoff provides a classic illustration of what this column has long maintained: stock exchanges are merely gambling dens that are only slightly more tightly regulated than casinos.
The Steinhoff empire – which includes Pep stores – is valuable, but not as valuable as the share price indicated.
So the losses recorded are not real – they are based on the speculation of what the company was worth.
This can be likened to a farmer claiming his cow produces 100 times more milk that of any other cow.
The farmer then allows other people to buy shares in this miracle cow and her offspring.
More and more people want to buy shares, so the price for each share rises.
The price of each of these “miracle” cows is soon 100 times more than that of any other cows.
But then it is discovered that this farmer’s cows are no different from any others and that they produce an ordinary quantity of milk.
The farmer lied.
Single shares that were once sold for R100 are now worth R10 or less, assuming they can be sold. The cows are still alive and producing milk, but in much lesser quantities than had been claimed.
An additional problem is that the farmer may also, on the strength of the value of his “miracle” herd, have borrowed quite a lot of money.
So, some of the cows will have to be sold or slaughtered to pay back the debts.
That means the remaining shareholders have even less capital than before.
And that, quite simply, is what happened at Steinhoff, where union investment managers spent billions of rands of pensioners’ money to buy Steinhoff shares that, it turns out, were not worth it.
But even the Government Employees’ Pension Fund that, on paper, lost about R12 billion, will not be bankrupt – it remains the wealthiest in Africa.
What has happened, however, has opened many eyes to one of the all too often hidden realities of the system.
It seems also to have strengthened the resolve of the public sector unions – led by the Public Servants’ Association of SA – to act to have workers take greater charge of their money.
And in the past week, there were the beginnings of Pan-African links with mining, chemical and textile unions affiliated to the IndustriALL Global Union.
Thirty representatives of unions from 14 countries responsible for communication gathered for a training session in Cape Town and to forge links.
These are small beginnings, small glimmers of light and, like the civic movements for change, they can – and must – be built to create a searchlight for justice for all.
That is my hope as I wish us all a corruption-free and more just new year.
