17 Dec 2014 | Tony Leon | Original Publication: Rand Daily Mail
It was long ago and far away, but it has eerie lessons
for the present
WHEN and where did you endure your first
“load-shedding”? Strangely enough, my first such encounter with a mass
electricity outage happened long ago and faraway. It was in a city (and
country) which is today the top-performing and arguably most modern economy in
Europe and the financial centre of the world.
For a middle-class South African boy brought up in the
stifling strait-jacket of Calvinist South Africa, London back in 1973 appeared
alluringly cosmopolitan and free. David Bowie and the “drugs, sex and rock ‘n‘
roll” siren calls had even breached the walls of my Natal provincial boarding
school. And for television-deprived South Africa, the idea of several channels
of evening TV to select from seemed impossibly exotic.
Despite strong parental warnings to the contrary, but
with the determination of a wilful 17 years, I cashed in the savings from
birthdays and bought an air ticket, found a cheap hotel, and departed these
shores in December 1973.
Talk about bad timing. My arrival in London coincided,
almost to the day, with the introduction of the infamous “three-day week”. The
UK at the time was hit by the double whammy of depleted energy supplies after
the 1973 Middle East War and the Opec oil crisis (some things don‘t change)
that drove up the price of coal, and a national strike as well.
The mighty National Union of Mineworkers demanded a
huge pay increase. Hapless Conservative prime minister Ted Heath was unwilling
to breach the wage freeze to meet the demand.
The UK economy, then called “the sick man of Europe”,
was battling a run on its currency and high inflation. It all has a rather
familiar ring about it, looking at our own current gloomy economic prospects
and power constraints.
What was also far different was the severity of the UK
equivalent of load-shedding of 40 years ago. Instead of celebrating New Year‘s
Eve bathed in the lights of Piccadilly Circus and channel-surfing the TV, the
lights were literally switched off and the evening TV screens went dark for
four days at a time, or for long periods during the days.
However, the singular advantage of being a young
visitor to Britain then was the strength of the rand, which at two to the pound
went further than it does today. But for Britons it was misery. Hundreds of
thousands of workers were laid off and the country plunged into national
despair.
It also finished off the prime minister. Heath called
an election two months later and lost power to Labour‘s Harold Wilson.
But Labour, which temporised with, rather than
confronted, the trade unions, settled the strike but on terms that saw their
five years in power end on an even worse note than the Conservatives.
Five Decembers later, in 1978, Wilson‘s successor, Jim
Callaghan, presided over an even more dire economic crisis, the “Winter of
Discontent”. This entered into grainy infamy with piles of unburied bodies in
Liverpool and mountains of uncollected rubbish in central London. Strikes were
now the rule, not the exception, and the economy was saved from collapse only
by a bailout from the International Monetary Fund.
Having witnessed the three-day week, I watched a
documentary on the second crisis the other night, Andrew Marr‘s History of
Modern Britain. It is worth the viewing to witness how a country can come back
from the edge of economic collapse and restore itself to the top table of
economic performers.
There is a very telling point in the middle of this
BBC documentary.
Marr describes how, in the middle of the winter of
discontent, Callaghan confided: “If I were a young person today, I would
emigrate from Britain.”
Many young South Africans are considering Callaghan‘s
advice in their own situation. Many young Brits did indeed leave.
Callaghan called an election a few months later and
lost power to Margaret Thatcher.
She had decidedly different views, and untried policies
from taming union power to mass privatisations of state-owned industries. She
destroyed the post-war consensus and divided her country, but arguably saved
the British economy. Tough, but essential medicine.
Goldman Sachs, the global super-bank, was one of the
chief beneficiaries of Thatcher‘s reform agenda when her “big bang” of
financial sector reforms transformed British banking.
The South African managing director of Goldman Sachs,
Colin Coleman, could hardly be called a “Thatcherite”, despite the position he
holds. He has a far more radical and activist past than most other bankers
around. He is also very bullish about the country‘s long-term future.
Last November, in the company of leading cabinet
ministers, he published the Goldman Sachs report Two Decades of Freedom. Its
upbeat note was premised. among other metrics, on his bank‘s forecast of 3.4%
GDP growth for the year ahead. Ruling party apparatchiks were quick to proclaim
it as proof positive of the “good news” achieved on their watch. Now, a year
later, in a recent speech based on the reality of a growth rate a third of the
forecast (1.4%), Coleman struck a more sombre note.
He drew attention to the “self-inflicted wounds” South
Africa has imposed on itself. Key among these are in the arenas of labour
conflicts, energy supply disruptions and what he terms “public sector
institutional weakening, inefficient and poor governance and management”.
This is much tougher stuff than the report of a year
ago, but in a deteriorating environment it is necessary to highlight. Among his
proposed solutions is a call for a “team South Africa” approach so the huge
economic inputs on offer from the private sector and elsewhere can be used to
help put the country, not just a narrow ideology, first.
Deputy President Cyril Ramaphosa was appointed by the
cabinet last week to rescue the three most-failed state enterprises — Eskom,
SAA and the Post Office. Let‘s see if he goes wide or narrow in crafting
solutions.
