Lost in the forest

Current planning and management of the South African economy can best be described by the English idiom “they can’t see the wood for the trees”. Furthermore, it is mirrored in the Zulu expression “dukuza”, meaning “to grope about in a dark forest”. That’s according to NICK PORÉE…

Why do I say this? Well, current planning has illogical objectives and unworkable processes, while senior officials appear to think that money grows on trees. The recent summary by the International Monetary Fund team says it all: “Raise the efficiency of the economy, particularly in network industries. Essential services, such as electricity, telecommunications, and transportation, are expensive and/or unreliable, contributing to the high cost of doing business. The issue needs to be addressed by enhancing competition in these sectors.”

This is a reflection on our ports, railways, road freight, and border administration, all tightly throttled by government institutions, with the resulting inefficiencies crippling private sector business. It also serves as a warning against the proposed Transport Regulation Bill currently under consideration by Parliament. If the Bill attempts to tamper with the market for services, there will be further inefficiencies and business closures.

The current debates and arguments about foreign drivers are an extension of the mindset created by the pervading socialist philosophy and its bureaucratic implementation by government, as a means to control the people instead of representing their needs. This is reminiscent of Lenin’s Soviet rule that was “nothing else than the organised form of the dictatorship of the proletariat”.¹

The transition from tribal authority to bureaucratic hierarchy is well described by Von Mises in his classic text, Bureaucracy.² His history of the transition in Europe is mirrored in South Africa, as we have a skewed version of European civil services. On the bureaucratic management of public enterprises, he says: “Bureaucracy is the logical successor to tribal, and despotic rulers; where everyone strives to conform, not to produce, and there is no way to measure success, or control the relationship between spending and activity.” Doesn’t this sound like South Africa?

Furthermore, he notes, “It is not an accident that socialist countries are ruled in a dictatorial way,” adding that “bureaucracy is imbued with an implacable hatred of private business and free enterprise”.

The current trajectory of governmental industrial policy is unsustainable. The cost of the bloated civil service and the administered costs of unproductive unionised labour, fuel price regulation, inflated costs of services, electricity, taxation, and the red tape required to obtain basic authorisations decreed by government are sufficient to deter private investment.

In a so-called democracy, it is incredible that the leaders of organised labour are permitted to use the Soviet (committee) system to “monopolise” the workplaces and try to force businesses into unsustainable decisions. If South African businesses cannot persuade government to change the rules to protect them from mob interference, they will simply cut their losses and invest in other countries. Unless there is a rapid change to industrial policy, there will be a reducing tax base and continual borrowing by government to fund the inflated civil service and provide grants for 20 million people with no hope of jobs.

In the transport and logistics field, there is a need for foreigners with their higher education, training, motivation, and their understanding that many businesses cannot afford the “utopian” conditions decreed by government. No small businessman can afford to offer guaranteed employment, jobs for life, pay for pensions, provident funds, unemployment, housing allowances, and all the perks paid to civil servants and demanded by unions. Foreign drivers work for companies within the agreed terms of employment, work the necessary hours, and do not attempt to apply mob rule to change the contract. In contrast, the Road Traffic Management Corporation (RTMC) – which has done nothing useful to improve South African truck driver training (or road safety) in the past 20 years – costs R1 billion per annum and pays its CEO an enormous R9,8 million a year.³

Industry experience is that 90% of South African driver applicants are incompetent and have never driven a real, modern, loaded, maximum mass vehicle combination. They have no experience and very little appreciation of the work of a heavy goods vehicle (HGV) driver. Many of them carry licences that were “bought” and even the legitimate licences are issued after a simple driving test on a toy-like unloaded vehicle. They are “qualified” HGV drivers at the age of 18, with a total lack of operational knowledge, who then pay for a Professional Driver Permit (PrDP), which rather than having anything useful to offer in terms of professionalism is an irrelevant bureaucratic procedure. To make it worse, the authorities are now planning to enforce the holding of this useless PrDP to appease the xenophobic self-appointed “associations”.

All of the official complicated manoeuvring is inimical to business efficiency, free markets, and national global competitiveness. Very few South African drivers can manage the complexities of cross-border operations, understand the geography and languages, deal with the officials, or cope with the discomforts of the job. The current Department of Transport/RTMC plans are likely to create severe barriers to South African trade into the region, as neighbouring countries close their borders to South African drivers.

The Ministry of Labour (Ministry of Unemployment would be a better name) presses on enforcing Employment Equity, based on the concept of mandatory employment conditions which effectively exclude 40% of the population from competing for jobs. The noble intentions and pronouncements of the National Economic Development and Labour Council (NEDLAC) are removed from the realities of competitive free-market economic activity and are barriers to investment and employment. The National Qualifications Framework (NQF) – and its theoretical academic approach to creating qualifications – is a delusion based on the weird assumption that badly educated high school leavers can be taught to be accountants, doctors, and engineers by subsidising them in universities, when only 4% of government school leavers can do arithmetic.⁴

There is a need to address the fundamentals of the problem and plan for realistic commercial solutions, instead of trying to force unworkable ideologies into the market for labour in the private sector. The current processes are simply fuelling conflict, as all parties take aggressive or defensive positions within the impractical framework created by government. It is time for the South African freight transport and logistics industries to create workable channels, compile evidence, and formulate effective advocacy to prevent government decision-makers from further damaging the logistics and road freight sectors, which are effectively the lifeblood of the economy.

References:
1. The Proletarian Revolution and the Renegade Kautsky – Vladimir Lenin (1918)
2. Bureaucracy – Ludwig von Mises (1944) ISBN 978-1-77323-046-7
3. AA of South Africa (November 2021)
4. Statistics SA – Report on Education (March 2015)