An open letter to our leadership
Dear Helen Zille, Patricia De Lille and Belinda Walker
cc'ed: Trevor Manuel, Dipuo Peters, Jacob Zuma
The South African economy should be growing as fast as the other BRICS countries, ie Brazil, Russia, India and China. Besides BRICS, Mexico South Korea and Angola are also growing rapidly at up to 15% real growth per annum for over 10 years!
So what are the main problems that prevent South African growth?
There are three central problems:
1) Lack of Electricity Supply and inability to effectively deliver electricity;
2) A worsening communications infrastructure;
3) No way to Communicate with Government.
In more detail:
1) According to David Murrin in his book "Breaking the Code of History", in order for strong GDP growth a country needs three things: Population Growth, Resources and Electricity Supply. South Africa has 500,000 new people every year and South Africa and the SADC have huge resources.
This leaves Electricity Supply, or lack of electricity supply. The government thinks they will lose R24 billion profit they get from Eskom. The Cities think they will lose the 60% to 90% of revenue they get from electricity sales.
But government (ANC and DA) is constraining electricity supply. If the electricity industry was deregulated today, then the economy could grow at 10% in real terms which is 15% with inflation. 15% growth is R450 billion per annum. Government is 1/3rd of the economy and therefore government's additional income would be R150 billion.
This number FAR exceeds the R24 billion plus the e-Tolls plus the Carbon Taxes, plus the Electricity Levy, plus all the other charges, water increases, electricity increase, rates and taxes increases, and administration overhead that government places on South African citizens and small business.
And this assumes that Eskom profit declines. This is highly unlikely as Jevon's Paradox shows that the faster Energy Efficiency and Renewable Energy grows in a country, the faster electricity demand grows and therefore the faster the up-take of base load (utility / Eskom) power grows! Therefore it is likely that Eskom's profit would grow by deregulating!
Note that building power stations assumes that the electricity can be delivered. But the South African transmission system is aging, and lack of maintenance and poor choice of equipment (saving money at tender stage rather than looking at long term costs) means that transformers which should last 35 years are now lasting 12.5 years on average. So even if we build 40 GW of centralised power stations, be they coal, nuclear or renewable energy, it is unlikely that that energy will be delivered effectively.
The answer is decentralisation of the grid and removing or decreasing electricity from a transformer. This will lengthen the transformer's life without it needing replacement by removing the burden on the transformer.
2) Over the past 6 months, many of my friends, colleagues, and I, have found that phone calls, cell phone calls, sms'es and emails get dropped, not delivered, or incorrectly delivered. Quality of calls is diminishing. And just at the time that Cell Phone companies profits have reached record levels. Cell Phone companies and Telkom obviously aren't reinvesting in infrastructure.
In order to have effective growth in the 21st Century, one needs a high quality and effective communications system. This would allow much more home working and people in rural areas, if given locally generated electricity and satellite and other communications system, could communicate and compete with people in the cities, thus alleviating one of the biggest challengers facing us in the 21st Century. For example it is expected that the population of the City of Cape Town will double from 4 million to 8 million by 2030! And if you've gotten in your car recenly, you will have noticed the increasing traffic jams and worsening roads. e-Tolls will not solve this problem.
Many overseas countries changed to ADSL2 and ADSL2+ 4 years ago! This allows increases in speed from 4 MBPS (mega bits per second) to 24 MBPS. And this is entirely possible over South Africa's infrastructure as I have been reliably informed that Telkom only use 4% of their Fibre Optic Communications Backbone.
So not only Eskom and the municipalities and cities, but also Telkom and the Cell Phone companies are constraining South African growth. I wonder if these people work for South Africa or the other BRICS countries?
3) The National Planning Commission (NPC) http://www.npconline.co.za/ have released a 444 page document for comment. I have spent 20 hours so far reading and commenting on the document and I have 30 pages of notes based on reading the first 120 pages. I have emailed NPC and phoned them to ask some questions, for example, by when do they expect the comments? The emails aren't answered and the phone rings and rings. Yet the NPC document calls for Active Citizenry, Strong Leadership and Effective Government. Is this just Greenwashing so that government can look good, or does Trevor Manuel mean what he says?
In summary, the problems in South Africa can be quickly resolved, but government must listen to its Active Citizens and it must reduce our burden, both taxation and administration, and at the same time deregulate electricity supply and remove communications constraints. Trying to get to speak to someone in government (ANC and DA) is an absolute nightmare. Things that should take minutes take months, for example, my wife applied for a birth certificate for her mother and the process took 9 months. My wife was born in Montenegro. Whilst we were there in January, she went into a police station and got a birth certificate in 15 minutes! In South Africa, my wife had to go to the municipal offices about 3 times, send faxes, speak to Pretoria monthly and eventually she got a document in 9 months!
All Active Citizens want is for government to do their job. If we can get to this today, in 2012, then by 2040, South Africa will be the top country in which to live.
Yours truly,
An active, committed, patriotic, South African citizen,
David Lipschitz
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