The curse of mineral riches

Do mineral riches matter at all for economic development? No, otherwise mineral deficient countries like #Singapore would be begging nations.

On the other hand, many mineral-endowed countries seem cursed to a perpetual state of underdevelopment or continually playing catch-up. Mineral riches also seemingly create lazy thinking, a thinking that fails to take cognisance of global market conditions and responding timely to changes coming over the horizon. It also engenders a thinking that depends solely on a fortuitous piece of natural luck that put a nation on top of mineral abundance.

Economic development is about making the smart choices that will propel the nation along a sustainable growth trajectory. It is also about harnessing comparative advantages, and where none seem to exist, smartly 'creating' these. 

Doubtless, mineral endowments offer a comparative advantage in a world that craves and depends on these. But this comparative advantage has to be exploited with smart strategies that are adaptable to changing global conditions. For if there is one lesson from modern economic history, it is that global conditions are always changing. This comparative advantage may not always be the same through the ages, so it is important to discern when it is time to change direction and harness or create new advantages. And mineral endowments are not forever...

Crying over the spilt milk of changing global conditions that mean your minerals may no longer be as valuable as they were yesterday is a sign of lack of forward planning, as are empty barns in times of drought.

Legalise sex work

And while at it, legalise marijuana too.

The main reason sex work is illegal in South Africa, a country with a progressive, secular constitution that recognises same sex partnerships, is an appeasement to the religious lobby. Interestingly, though, sections of these self-same religious groups have reduced their sensitivity towards same sex relationships and they now even ordain gay priests. Why then still leave sex work out in the cold?

And as far as marijuana is concerned, it seems indisputable that it has medicinal properties that are advantageous towards the treatment or amelioration of the pain of cancer sufferers. In addition, the criminalisation of marijuana use discriminates against the cultural beliefs of some indigenous South Africans, which surely violates the constitution.

The legalisation of both sex work and marijuana can enable the tax authorities to bring both into the tax net and generate additional revenues. And it would also free the police to focus their resources on more debilitating crimes.

Tinkering at the edges...

Leaders flying economy is good. It sends a message of austerity, and that it is no longer business as usual. It is also good PR, especially in an election year.

But here's the thing: it distracts us from focusing on the big prize.

These initiatives will, at best, save a few millions, while on the other hand the country spends billions bailing out the likes of SAA. Or being tardy in implementing national projects, with the result that they cost millions and billions more than they should have. The priority should be fixing SAA, putting in place a competent board, hiring the best management team, striking the necessary alliances. The priority should be implementing growth policies. Which would you rather applaud?

By all means, let us do the PR. But let us also do the real work.

Praying for rain...

By all means, let the people pray for rain. Let those who want do the rain dance.

But...

Leaders should refrain from burying their heads in the sand. The science, the economics are long settled. Do the work the electorate expect of you and leave the metaphysics to the citizens.

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Smart decisions

Smart decision making is about knowing that you cannot remain still, knowing that the country has to keep moving forward, adapting to changing internal and external dynamics. It is also about developing a culture of smart execution, and not just having supposedly great paper strategies. For without smart execution, you have nothing.

Execution is not just about taking decisive action, it is also about taking timely action. Unresponsive 5-year plans, or rigid priorities that are set once and cannot be revisited even when conditions change, are a recipe for disaster. Continuous consultation, perpetual and timid postponement of action, are enemies of progress.

In these turbulent times it is sometimes necessary to turn on a tickey. Smart leadership is having the confidence to execute this without skipping a heart beat.

Smart decision making is also about making tough choices. It is about creating the conditions where your citizens know and accept that to have a prosperous future, they have to accept and endure the pain of today, the pain of transition from one phase in their forward motion to the next.

Easy choices are easy to make, and they make for transient happiness and satisfaction, but they mean harder and more painful decisions later. The time for hard choices is now.

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