Beware of being 'Proudly SA'
24/03/2004 14:30 - (SA)
Howard Preece
Associate editor - Finance Week
Cape Town - Few organisations seem as well meaning and indeed as non-controversial as Proudly South African. At first sight. Who, it will be demanded, could possibly be against its core campaign slogans:
* Buy SA goods in nearly every case where they're available.
* Never mind if SA products and services cost a little more than foreign rivals - but do everything to improve SA quality.
* Holiday within this country as often as you can rather than overseas.
* Whatever business that you're in - and no matter what size - sign up for membership of Proudly SA and put your patriotism on show as an example to others.
And what's it all about? Allegedly, self-evident. To give a huge helping hand to SA producers and to preserve jobs. Proudly SA says that its campaign "is working to improve the economy of SA and to have our people understand that the more support good local products and services receive, the faster unemployment can be reduced".
In blunt form, Proudly SA says: "Buy a German toaster and help protect jobs in Germany. Buy a locally-made toaster and help protect jobs in SA."
That certainly has the support of most if not all SA trades companies as well as, necessarily, all companies producing for the SA market. The SA Clothing and Textile Workers' Union has launched a campaign to boycott "unpatriotic" groups that don't come into line. Sactwu talks of "greed" by some leading retailers putting SA workers out of jobs. So at last SA is on the road to economic regeneration, right? No, it most definitely isn't.
Take Proudly SA's toaster example. If German toasters can be landed in SA cheaper than the same product can be made here, then urging consumers to "buy South African" is effectively asking ordinary people, many short of money, to subsidise SA inefficiency.
What the campaign should be urging is in-depth research on why SA toasters cost more than First World imports in spite, in theory anyway, of a host of natural advantages. There could be greed in play across huge sectors of the SA economy - by workers, managers and investors.
Proudly SA should not allow membership on demand. It should be limited only to SA companies and others that can prove cost-efficiency and value. And don't forget that the SA Government's anti-business stance (and, on occasion, that of the SA Revenue Service) contributes to SA's competitive weaknesses.
Sactwu's approach is perhaps worse than any. The burden of effectively being forced to buy overpriced SA clothing and other such goods rather than much cheaper imports would hit the poor hardest.
Don't think it's all the fault of the rand either. The inflation-adjusted index for the real effective exchange rate was 92.88 last November against a 1995 base of 100. However, there was no public outcry then about an overvalued rand.
Hard reality is that for decades huge sectors of the SA economy have thrived on protection. But this, as Trade Minister Alec Erwin and others accept, is the road to long-term failure and not success.
Here's another question for PSA:
Why, for instance, should South Africans pay grossly excessive prices to holiday in Cape Town - and remember SA Airways' role in this - so that the exploiters should be richly rewarded?
If the Proudly SA group was genuinely serious, it would expose and disown every grubby profiteer in SA.
But the full story is vastly greater. Trade is the central engine of the world economy. The half-century 1950 to 2000 saw the greatest expansion ever in the aggregate growth of global prosperity and world living standards.
The "golden age" of the decades immediately before war erupted across Europe in 1914 showed a similar, though more restricted, experience.
By contrast, the grim international economic catastrophe from the late Twenties into much of the Thirties is still known today as the Great Depression. That was when the world was variously "proudly" American, British, French or whatever ? and poverty and joblessness soared everywhere.
In stark contrast, the periods between 1870 and 1914 and 1950 and 2000 were both marked by huge expansions in international trade and in cross-border investment. They were, broadly, eras of liberalisation in spite of all kinds of imperfections. They were times of what we now know as "globalisation".
Things were hugely different globally between 1919 and 1939. There was a steady retreat from globalisation and a widely increasing belief in nearly every country that unemployment could be "exported".
The way to achieve that, it was urged and acted on, was through much greater use of tariff and non-tariff barriers against imports. That, it was naively assumed, would make local goods (and local jobs) much more secure against the "threat" of foreign competition.
If John Kerry wins the coming presidential election in the US, watch for a resurgence of this: in fact, look for it centre stage in the election itself. Then ask how much good any "buy local" campaign is when it's matched in downward races by a host of similar campaigns elsewhere.
hpreece@ftfw.co.za
Edited by Fadia Salie
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