Insanity in public affairs
By Eddie Cross
In the past few weeks we have witnessed what can only be interpreted as a form of insanity in public affairs. In the United Kingdom the Prime Minister seems hell bent on trying to negotiate the impossible – a decent relationship with Europe outside of the Union. I said in a letter like this one when the Brexit Referendum result was announced, that Brexit was simply not possible – at least not if you wanted to maintain the United Kingdom as any sort of global power.
The UK has an economy based on services (over 80 per cent of GDP) and has near complete reliance on Europe for the bulk of this business. Outside Europe, the Ireland issue simply cannot be resolved and outside Europe, the UK simply becomes another medium sized economy with massive problems that will take years to resolve. I simply cannot see London remaining as a global financial center.
Despite all the evidence and the tough principled position of the EU Officials leading the talks, Mrs. May continues to beat her head against the wall – even Tony Blair has come out and said its time to rethink the whole thing and go back to the people in a new referendum. I cannot see any other way out.
This morning I turned on the TV and heard that Mr. Trump has imposed a 25 per cent import tariff on steel and a 10 per cent tariff on aluminum. Both essential inputs to the industries of the US and on whose cost their competitiveness in global markets depends. The USA, like most of the rest of the Western World has virtually no steel industry left – these were part of the ‘rust belt’ that has died because they simply could not compete with the new steel producers in the Far East with more modern technology, new factories and lower costs of production.
Most economists would argue that these are sunset industries for the USA whose future does not rely on 19th century production plants but in 21st century technology-based industries where the USA has a clear competitive advantage.
But it made no difference to Trump – he was elected on the basis of a number of crazy undertakings – the Mexico Wall, the ban on immigration from Muslim States and the commitment to revive the coal and steel industries of the rust belt. The blue-collar communities of these areas lapped it up and despite all the evidence to the contrary went on to elect Trump to the Presidency. Now America pays the price. Like Brexit, there will be consequences to these massive tariffs, foreign steel producers like China and Japan will demand counter measures under World Trade Rules.
Consumers of steel products in the States including the construction industry and the car industries will cry foul and be unable to compete in tough markets abroad. Companies will be forced to relocate production to units still able to secure supplies more cheaply and there will be job losses in the USA. The consequences are far reaching.
If anyone was not yet convinced of the problems created by global warming, spring in Europe right now should change their minds. Just in case anyone has not realized this – it is officially spring in Europe – you know, green grass and flowers, instead, Europe is frozen solid, snow has closed roads and airports and people are dying in the open air and even in their homes. Yet Trump pulls out of the global agreements designed to tackle the issue and goes in the opposite direction – calling for old plants to be reopened and for coal to rejoin the US energy mainstream. It is not just bad policy, its insanity.
Just to complete the circle, the new President of South Africa takes time to address Parliament and says that his Government will take steps to take over land without compensation for distribution to ‘Africans’. Incredibly South Africa takes a wrong turn and goes down the same disastrous road that Zimbabwe has driven since 2000.
It is difficult to even contemplate such a measure in the South African context – the Constitution which was so painfully crafted, and which led to a peaceful transition to a majority Government despite 300 years of oppression and discrimination, does not allow this new policy. The reference to ‘Africans’ denies the rest of the South African population – Afrikaners of Dutch and Huguenot extraction, Mixed race populations, the Indian Community, the full rights of Citizenship and is racist and discriminatory and not allowed under South African law.
Title rights cannot be tampered with, without serious economic consequences. Once the principle is established it rapidly becomes infectious and the temptation of getting something for nothing – like theft, is very tempting and simply cannot be restricted to a narrow sector of the economy.
But worse than that – their own experience with South African managed land reform to date (23 years) shows quite clearly that the South African Government itself has no clue as to what to do with the land that has already been purchased under current laws. Almost without exception productive farms have been taken over and have collapsed into a state of destitution and land degradation. New settlers have not been given any form of security and in many ways now resemble the former Bantu Homelands where the benefits of almost a quarter of a century of freedom has brought virtually no change.
South Africa is not an easy place to farm, it has a highly variable climate and most of the land held by commercial farmers is subject to frequent droughts and other vagaries of the weather. Some of South Africa’s best agricultural land is held under common title and is almost totally unproductive – surviving as a kind of retirement area for families who make their living in urban areas. If this form of title is extended to the more fragile regions of the country, the consequences for land use and conservation are profound and will be long lasting.
But more importantly all they should do is look north, in many African countries the Governments are discovering that the key to progress in economic and social terms lies in going in the opposite direction – give people title rights to the land they occupy and use. Ghana, Rwanda, Kenya, Tanzania, Zambia are all progressive examples of States who are now reaping the dividends of this policy. Zimbabwe is perhaps the best example of what not to do – we have converted two thirds of previously titled land into State land without title rights. In the process agricultural output has declined 70 per cent or more and the country, once self-sufficient, is now importing most of its food needs. Our GDP per capita is now one of the lowest in the world and the proportion of our people who are defined as absolutely poor is over two thirds.
Then there is the position in Syria where Assad and the Russians are determined to wipe out the population of a region that refuses to fall into line with the Regime. To me it looks like the German exercise to eliminate the Jewish quarter in Poland during the Second World War. Once again, despite all our history and understanding we stand by and do nothing.
Why not supply the affected Community with the equipment they need to fight back – especially against air power. Why not a ‘No Fly’ Zone? Just more talk at the UN and no action to back it up by the major powers. Then the specter of Mr. Putin announcing a new nuclear weapon that can strike anywhere in the world without any defence – as if this is a major achievement? I would have applauded him if he had announced that his people are 10 per cent better off after a year of hard work. But no, just more insanity among national leaders who should know better.