Ben Oostdam story # 356

SA 2020


This story is by Spencer Steward writing for the highly recommended and very informative MBENDI Website Newsletter (of April 18, 2008). I include this story because we visited that part of South Africa on our recent journey. By coincidence, I had also found reference to another site in this region, viz. Uitenhage, west of Port Elizabeth, on the weblog of the Mayor of Amstelveen, Holland (where my parents lived from 1946 to 1985)


Every few months I make a pilgrimage to visit my mother in an old age home deep in the rural Eastern Cape region of South Africa. As I drive through that beautiful countryside, I always find myself trying to imagine global issues in the eyes of the locals as I flash past them and a fascinating, thought-provoking exercise it is too. Just outside Port Elizabeth is the Coega Industrial Zone (link by BLO), which we mention from time to time in our African business round-up. Right now it consists of a harbour with no berths and an impressive network of roads and cables with, here and there, an office block or small factory. The plan is that Rio Tinto will build an aluminium smelter and PetroSA will build an oil refinery there, though the long-term economic logic sometimes defies me. Each plant will employ a small workforce, mostly the technical people who are in short supply in the country, and so make a very small dent in local unskilled unemployment. Both plants are situated far from both raw material inputs and markets for finished products at a time when transport costs are rising and both plants require cheap electrical power, somewhat rare in this neck of the woods. And if world oil production does peak - and this week Russia, the world's second largest oil producer, reported declining production and Nigeria, Africa's largest producer, predicted its oil production could drop more than 30% by 2015 - then the refinery will be competing with the rest of the world for limited supplies of feedstock. And then there's the problem of emissions. I scratched my head and sped on. Not much further down the road is a verdant agricultural region. Maybe I should speak in the past tense, because the farmers are tearing down their fences, laying off their staff, selling their sheep and cattle and stocking their land with game animals. Every time I pass that way there's a new game farm with a fancy lodge trying to compete with all its neighbours to be the best malaria free game park around. With food and jet-fuel prices both soaring, and likely to continue rising, one has to wonder how long it's going to be before the fences go back up and the lodges revert to being farmhouses again, while the tourists stay at home unable to afford international travel? For more than a century, my wife's family has farmed and exported citrus from the Kat River valley (link by BLO). Recently, in partnership with the The Industrial Development Corporation of South Africa (IDC) (link by BLO), another dozen farms in the old Ciskei area were brought under their wing so they could use their years of experience to mentor new farmers drawn from local disadvantaged communities. If I stop in, I love to hear stories of how the project is progressing as well as how they are coping with the latest challenges of competing in global export markets. Even if I just drive by, I always watch for signs of new orchards coming to life. Once over the top of the mountains and past the Waterdown Dam, an extensive village of small, neat houses appears, each with a plot of vegetables and maize. Mentally I salute the courage of those who, in the apartheid era, were simply dumped with their belongings in the veld here and left to fend for themselves far from jobs and family, a fate so vividly described by Father Cosmas Desmond in his book The Forgotten People (link by BLO: ironic, isn't it?). I hope it's a lesson not forgotten by the present government as they redistribute land to the previously displaced - overcrowded rural settlements are unproductive food producers and provide at best a hand to mouth existence for those settled there. I reached my old home town to find flags flying to celebrate the 150th birthday of my old school. It was started back in Victorian times for the children of European colonists and, even in my school days, I remember a teacher vowing that a black child would never be allowed to don the school blazer. Today, more than 80% of the pupils are black and they wear the uniform with the same pride and smartness as the youths of yore. Certainly, the racial transformation of the Eastern Cape's top schools is one of the unheralded triumphs of the new South Africa. More impressive still, though, is the school started by a local housewife in her garage for the children of her domestic servants; today it is a flourishing private school of 650 pupils in a low income suburb, thanks to her energy and generous donor funding. I watch for the matriculants of all these schools becoming the business and political leaders of tomorrow's Africa. I won't be attending the birthday celebrations this week-end. The old boy guest of honour spent so much time playing sport at school that he took fourteen years to complete a twelve year curriculum, then abandoned his native country for the easy life in Australia - not exactly the best role model for today's scholars. However it is illustrative of a trend for South Africa's top schools, unlike their Asian tiger counterparts, to exalt prowess at sport at the expense of academic achievement, despite learning being their raison d'etre, even more so in a society so chronically short of skilled people. (Incidentally, this is not just a South African problem: a November 2007 survey found none of the higher paid public university presidents in the USA earns as much as the head football coach of their university!) There was a thunderstorm in progress as I pulled up to the old age home. As I sheltered in the car, I remembered how, as children, we would watch the white clouds gathering over the mountain of a hot summer's day. In the late afternoon, they would turn purple and sweep over the town in a flurry of rain, hail, thunder and lightening. Then they'd be gone, the sun would come out and there would be that wonderful smell of steam rising from the rich, red African soil - magic! When I shared my memory with a long-time resident, she lamented the fact that those storms rarely come these days. Maybe climate change has found even this otherwise forgotten corner of the earth?

(BDO Spencer Steward offers a range of business advisory, tax and consulting services, with a special focus on expatriate matters and transfer pricing, as well as traditional accounting and auditing services. )
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