COSATU Media Monitor Special Bulletin, 18 June 2013

[Norman Mampane]

COSATU Media Monitor Special Bulletin   

Tuesday, 18 June 2013

 

COSATU E-toll Campaign goes ahead in 2013

 

COSATU National Collective Bargaining, Organizing and Campaigns Conference Special Declaration

 

http://www.cosatu.org.za/show.php?ID=7062

 

COSATU has served a Section77 Notice at Nedlac on the 11^th December 2012

http://www.cosatu.org.za/show.php?ID=6785

 

COSATU E-toll Campaign goes ahead in 2013.

http://www.cosatu.org.za/show.php?ID=6793

 

Stop Commodification of public goods!

 

The articles in the Media Monitor do not represent the views of COSATU. They are selected because we believe they deal with topics of interest to our readers, who will then be informed on how the media is reporting and commenting on these topics. It will enable them, if necessary, to respond to inaccurate, misleading or biased reports or comment.

If we have excluded other articles which readers wished could have been picked, this was not intentional but because of tight time-frames. If you have seen article worth to be shared email it.

 

COSATU is on Twitter and also has a Facebook Page!

 

To participate and follow the Federation debates hashtag on Twitter #cosatu and/or search for Cosatu Today after logging.

 

 

Contents

 

Workers’ Parliament

Ø  Union hold-ups "fuel Lonmin tension"

Ø  Amcu members walk out of Marikana cleansing ceremony

Ø  Marikana cleansing ceremony successful - with gallery

Ø  Oliphant unaware of farmworkers' strike

Ø  Headcount tightens as banks shed jobs

Ø  Court interdicts Samwu strike

Ø  Amplats workers end underground protest

Ø  Wage-driven growth is the answer

Ø  Government tackles unemployment

Ø  Motlanthe's mining pact and the rand

Ø  New era for the job hunt

Ø  Portuguese teachers boycott exams in anti-austerity strike

 

South Africa

Ø  Bafana Bafana lose World Cup qualifier

Ø  Teen raped on Youth Day

Ø  South Africa not in crisis - Kathrada

Ø  SA must solve youth problems in honour of 1976 youth: Mapisa-Nqakula

Ø  South Africa has changed for the better, says Zuma

Ø  Youth urged to uphold moral values

Ø  How a small factory in Port Elizabeth conquered the world

 

Alliance

Ø  Malema accused of committing 'political suicide'

 

International

Ø  Cameron urges G8 leaders to draw inspiration from hosts N Ireland

Ø  Zuma congratulates Iran’s new leader

Ø  Mining Firms Face New Regulator Scrutiny Amid Deal Probes

Ø  Economic week ahead: All eyes on the Federal Reserve

Ø  Turkey could deploy army to quell protests

Ø  Turkish Unions March to Protest Police Crackdown in Istanbul

Ø  Zimbabwe wants "equitable" media treatment before elections

Ø  Catholics and Lutherans will jointly mark Reformation’s 500th anniversary in 2017

 

Comment

 

Ø  COSATU E-toll Campaign goes ahead in 2013

Ø  COSATU Section77 Notice served at Nedlac on the 11th December 2012

Ø  Turkey’s economy is vulnerable

Ø  Economic worries and the global elite

__________________________________________________________

1.          Workers’ Parliament   

Union hold-ups "fuel Lonmin tension"

SABC News, 17 June 2013

African People's Convention leader Themba Godi has called on Lonmin Platinum mine management to fast track the process of declaring AMCU a majority union. 

Godi was addressing more than 2 000 people during a cleansing ceremony held at Marikana, where 34 miners were killed last August.

"They need to speed-up the recognition of AMCU, because that is what is continuing to fuel the tension.We don't understand why management is dragging its feet when it is clear that AMCU has a majority.

"They had a recognition agreement with the NUM, and now that they must transfer that to AMCU, it looks like new rules are being put on the table," he said.

The cleansing ceremony is organised by the Bojanala District Municipality. 

44 sheep have been slaughtered at the Koppie by families of the 44 people who were killed during the course of the strike.

Rituals will be performed and at a later stage people will pray near the Koppie.

__________

Amcu members walk out of Marikana cleansing ceremony

 Samuel Mungadze, Business Day, 17 June 2013

FAMILIES of the people who were killed at Lonmin’s Marikana mine during an illegal strike in 2012 held a cleansing ceremony on Monday.

Forty-four people were killed at Marikana near Rustenburg in the North West in August 2012 — 34 during a confrontation between striking workers and the police on August 16.

Families of the deceased gathered at the koppie where the miners were killed to conduct the cultural rituals.

Hundreds of the Association of Mineworkers and Construction Union (Amcu) members walked out of the ceremony. It was unclear why the Amcu members left the ceremony as they were willing to engage with the media.

Senior regional member of Amcu Obakeng Evans Ramokga said he didn’t know why the members had left before the North West Premier Thandi Modise had addressed the crowds.

Forty-one families of the 44 of the deceased performed their cleansing rituals earlier by slaughtering either a goat or a sheep.

Those present travelled from locations including the Eastern Cape and Limpopo. Some even made the journey from neighbouring countries like Malawi, Swaziland and Lesotho.

A commission of inquiry, headed by retired Judge Ian Farlam, was probing the circumstances of the deaths.

_________

Marikana cleansing ceremony successful - with gallery

Sapa, Times Live,  17 June 2013

At first light, relatives of 44 people who perished in Marikana, North West, last year gathered at the scene of the bloody shooting to cleanse the ground where their loved ones fell. Widows' songs of praise turned into frenzied wailing as they got off the bus. With the sun rising at their backs, about 200 male relatives walked quietly to the small koppie where 18 miners were shot dead by police. at the hill, they prayed to the deceased to let go of the fight for better wages. After that, relatives lined up for the 30 goats and 20 sheep. Each family got a sacrificial animal to slaughter as part of the cleansing ritual. Marikana. 

 

At first light, relatives of 44 people who perished in Marikana, North West, last year gathered at the scene of the bloody shooting to cleanse the ground where their loved ones fell. Widows' songs of praise turned into frenzied wailing as they got off the bus. With the sun rising at their backs, about 200 male relatives walked quietly to the small koppie where 18 miners were shot dead by police. at the hill, they prayed to the deceased to let go of the fight for better wages. After that, relatives lined up for the 30 goats and 20 sheep. Each family got a sacrificial animal to slaughter as part of the cleansing ritual. Marikana.

 

At first light, relatives of 44 people who perished in Marikana, North West, last year gathered at the scene of the bloody shooting to cleanse the ground where their loved ones fell. Widows' songs of praise turned into frenzied wailing as they got off the bus. With the sun rising at their backs, about 200 male relatives walked quietly to the small koppie where 18 miners were shot dead by police. at the hill, they prayed to the deceased to let go of the fight for better wages. After that, relatives lined up for the 30 goats and 20 sheep. Each family got a sacrificial animal to slaughter as part of the cleansing ritual. Marikana.
At first light, relatives of 44 people who perished in Marikana, North West, last year gathered at the scene of the bloody shooting to cleanse the ground where their loved ones fell. Widows' songs of praise turned into frenzied wailing as they got off the bus. With the sun rising at their backs, about 200 male relatives walked quietly to the small koppie where 18 miners were shot dead by police. at the hill, they prayed to the deceased to let go of the fight for better wages. After that, relatives lined up for the 30 goats and 20 sheep. Each family got a sacrificial animal to slaughter as part of the cleansing ritual. Marikana. 

 

At first light, relatives of 44 people who perished in Marikana, North West, last year gathered at the scene of the bloody shooting to cleanse the ground where their loved ones fell. Widows' songs of praise turned into frenzied wailing as they got off the bus. With the sun rising at their backs, about 200 male relatives walked quietly to the small koppie where 18 miners were shot dead by police. at the hill, they prayed to the deceased to let go of the fight for better wages. After that, relatives lined up for the 30 goats and 20 sheep. Each family got a sacrificial animal to slaughter as part of the cleansing ritual. Marikana. 

A cleansing ceremony held in Marikana on Monday by the families of those killed during illegal strikes at Lonmin’s platinum mine was successful and emotional, the Bojanala Platinum district municipality said.

“The ceremony was extremely emotional and the families broke down terribly for about an hour,” spokesman Archie Babeile said.

“They were coming here for the first time since the massacre in August and it was quite difficult for them to come back to the area where they lost their family members.”  Babeile said the ceremony was expected to start at 4am with the ritual and cultural practices but due to logistics it started after 6am.

Families were booked into a hotel in Pretoria where they were attending the Farlam Commission of Inquiry into the deaths of 44 people in Marikana, he said.

On August 16, police shot dead 34 miners at Marikana. A further 10 people, including two policemen and two security guards, were killed during the violent strike in the preceding week.

Forty of the 44 families attended the cleansing ceremony.

“The ritual went successfully well... The families went out to the field where the tragedy occurred and slaughtered the sheep there,” said Babeile.

“The cleansing ceremony was not only for the miners but for all those who died in Marikana in August. The families said they were not hurt because their family members died but how they died.” The slaughtering of sheep and various rituals performed by each family in terms with their different cultures lasted about four hours, he said.

Babeile said there were families who requested to perform the rituals at the exact place where their family members died and not on the koppie.

The municipality arranged for the ceremony to take place on the koppie and told the families that if they wanted to come back at a later stage they could, he said.

“They raised the concern late and there were no plans to go to those areas but instead the municipality made a commitment that should they wish to perform rituals later they should let us know and we will assist.” 

To ensure that the ceremony did not turn into a political platform no union T-shirts were allowed and white T-shirts were given to the families.

White doves were released by the families as a sigh of peace and reconciliation, he said.

“The families regarded this as a means of closure,” said Babeile.

“The families indicated that they are happy that something was being done to heal the scars which are hugely visible within their hearts.”

___________

Oliphant unaware of farmworkers' strike

Fin24, 17 June 2013

 

Cape Town - Labour Minister Mildred Oliphant is not aware of a planned farmers strike, EWN reported on Monday.

Oliphant, who recently met with farmworkers and labour union bosses, said she knows nothing about claims of looming protest action.

"I said they mustn't mislead the workers", Oliphant was quoted. 

She also spoke to farmworkers and told them not to be misled by their leaders.  

Oliphant also urged workers to take up any concerns with their employers.

There was claims recently of farm unions planning another strike over the use of labour broking.

Farming towns across the Western Cape came to a standstill between November and February during a protest by workers against poor wages and harsh living conditions.

De Doorns was the epicentre of the protest action.

The protests led to Oliphant increasing the daily minimum wage for farmworkers to R105, after input by farmers and workers.

 - Fin24

___________

Headcount tightens as banks shed jobs

Thekiso Anthony Lefifi , Business Day, 16 June 2013

·          

BETWEEN 2008 and 2013, South African banks got rid of almost enough employees to fill the FNB Stadium.

According to Adcorp’s latest figures, the sector shed 82,000 jobs in the past five years. Almost all the major banks have cut staff.

Standard Bank is retrenching some employees in its IT department. About 150 staff members have to reapply for their positions or other vacant jobs in the group. Banking union Sasbo started negotiations on the issue with the group on Friday last week.

This week, Standard Bank confirmed that “a decision has been made” to reduce the number of internal IT support roles in the company.

Standard Bank employs more than 4,000 IT professionals. “After careful consideration of all the options available to remedy inefficiencies, the difficult decision has been made to reduce the number,” the bank said.

Sasbo said it did not regard the banking sector as a creator of jobs in the country.

Ernst & Young’s latest banking index report showed banking confidence was marginally down in the first quarter of this year. The index showed that confidence was lower in the retail banking segment.

In 2010, Standard Bank had more than 53,300 staff members globally. This has dropped to 49,000. In 2010, it retrenched some staff and temporarily stopped all new hirings.

Absa has also not been creating new jobs. Five years ago Absa, led by CEO Maria Ramos, had just more than 37,800 permanent employees, but by its financial year-end in December it had reduced that number to about 33,700.

According to Absa’s annual report, “the decrease was a result of streamlining” its business.

Last year, the group retrenched a number of staff members in its IT department. It denied it was a retrenchment programme, calling it a “reassignment” exercise. This resulted in the group’s IT-related costs dropping to R5.1bn from R5.3bn.

Absa was forced to cease the “reassignment” exercise following a lengthy battle with employees’ unions.

According to PwC’s annual banking report, tight headcount management will continue to be a top priority for banks.

Last year, FirstRand, parent company to First National Bank (FNB) and Wesbank, reduced its local staff complement by 2%. It retrenched 500 people, dismissed 157 and accepted 1,414 resignations. A further 521 employees left the Sandton-based group owing to non-renewal of contracts, mutual terminations and retirement.

However, all this was countered by a 5% increase in new appointments, so its total workforce increased to 36,398 from 34,612.

Nedbank, the country’s fourth-largest bank, has been creating jobs in the recent past. This is mainly due to the fact that Nedbank had for years turned its back on low-income earners in favour of the elite.

Nedbank has recently aggressively been trying to catch up with its peers that had been playing the lower-income market for longer.

Nedbank chairman Reuel Khoza said it had created 1,700 new jobs since 2009.

Smaller banks have been growing their employee numbers, but from a low base.

Capitec had 4,000 employees in 2010. That had more than doubled to 8,308 by February. Capitec created 1,114 new positions in the past financial year as it continued to increase its footprint across the country.

The country’s largest unsecured loans provider, African Bank, shaved off almost 1,500 jobs between 2010 and last year.

The banking division of the owner of Ellerines, Wetherlys and Dial-a-Bed increased its employees from just 3,900 to 5,100 because it is rolling out its branch network.

The company had 15,927 staff members in 2010. However, by its 2012 financial year-end, the group had only 14,430 people working for it. The group had reduced staff members in the furniture retail side from 11,992 to 9,248 by the end of the past financial year.

• This article was first published in Sunday Times: Business Times

__________

Court interdicts Samwu strike

Shain Germaner, EWN, 17 June 2013

JOHANNESBURG - The Ekurhuleni Metropolitan Municipality on Monday said it has managed to obtain an interdict to prevent thousands of South African Municipal Workers’ Union (Samwu) workers from striking.

Workers at the Brakpan Bus Company have been involved in an ongoing labour dispute.

Samwu wanted all its members to join in a sympathy strike on Tuesday.

But the council secured an interdict to prevent the industrial action.

Municipal spokesperson Sam Modiba said, “The municipality on Sunday successfully interdicted the union’s plan to embark on a strike.”

Modiba said if workers take part in Tuesday’s strike, they could face internal disciplinary action.

In May, Samwu members took part in an illegal strike following a wage dispute.

The strike was called off to allow negotiations to continue.

_______

Amplats workers end underground protest

Reuters, EWN, 16 June 2013
JOHANNESBURG - Anglo American Platinum (AMSJ.J) said on Saturday operations at its Thembelani mine in South Africa were back to normal after a "group of employees" on Friday prevented 2,400 workers from going above ground.

"The situation at the mine is normal, people came above ground yesterday evening," Amplats spokeswoman Mpumi Sithole said.

The industrial action followed the dismissal of four union shop stewards for "inappropriate behaviour". 
__________

Wage-driven growth is the answer

Comment Niall Reddy, M&G, 14 June 2013

·          

·         It would defuse increasingly hostile labour relations and create a more equitable society.

 

With reports of wage demands in excess of 20%, the upcoming bargaining season — the first in the post-Marikana era – promises to be especially portentous for the country's evolving class relations.

The predictable media onslaught against "irresponsible", "above inflation" demands (as though workers should be happy about getting a little poorer each year) is already in full swing and has drawn pre-emptive support from President Jacob Zuma and Gill Marcus, governor of the Reserve Bank.

But high wage demands are not greedy or reckless – they are a rebellion against two decades of declining livelihoods and a challenge to the economic structures of unequal, profit-led growth.

The view that high wages are bolstering a "labour aristocracy" at the expense of jobs for the rest has become an article of faith in economic journalism but its pervasiveness is better explained by the depth of media bias than by any scientific merit.

In reality, there has been no break with apartheid's low-wage regime. Inequality has ballooned, but this is hardly evident when looking at average Cosatu workers and young new entrants into the work sector. Rather it's the top decile who have seen their fortunes radically diverge from the rest.

Statistics South Africa's household surveys, rather than private data sources, reveal that most workers experienced virtually no improvement in wages during the period 1997 to 2011. The median real wage for a formal sector worker in 2011 was R3 800 (in 2011 prices) – the same as it was in 1997.

On the other hand, the 90th percentile real wage went from R11 670 in 1997 to R15 500 in 2011.

The data shows that the 22.7% increase in the formal sector average wage during the past 15 years was entirely due to increases for the top earners, which is confirmed by many firm-level studies that show South Africa's putative "high wage" distortion to be largely due to bloated salaries for managerial staff.

Widening wage inequality
Moreover, highly skilled workers were the only category to make substantial wage gains – evidence, some suggest, of a premium paid out due to the skills crisis.

Supply and demand have some effect but they give no ultimate explanation of the distribution of value, for which we must look to the struggle of contending classes both as it takes place on the factory floor and in the broader social and political institutions to which it gives rise.

Widening wage inequality represents the failure of the democratic state and the labour movement to dismantle and reverse historically inscribed class disparities.

Key institutional victories in the form of hardened legislation and collective bargaining systems have proved impotent in the face of widespread shifts towards informalised labour and the onslaught of neoliberalism.

As such, labour's share of private sector gross domestic profit (GDP), even when managerial wages are included, has shrunk from about 49% just before apartheid to about 42% today.

Marikana and De Doorns are the social expression of these realities. Their example has the potential to ignite a simmering filament of rage among workers into an open rebellion against the political and labour market institutions that have allowed South African businesses to reach for ever more obscene profits on the backs of workers.

Discomforting claim
According to analysts Brian Kantor and David Holland, South African firms are now among the most profitable in the world, a claim that sits uncomfortably with insistences that business "can't afford" decent wages.

Therefore reports of wage demands of over 20% from Cosatu unions are unsurprising. Unions will either have to align with this social anger or fall victim to it, as the example of the National Union of Mineworkers shows.

The recent melee in Cosatu's boardroom should also be seen in this light. This isn't about the political preferences of the federation's individual leaders – it is about one section of the leadership realising that resentment among the membership will not be dissipated by piecemeal reforms or symbolic actions as long as the macro­economic landscape remains fundamentally skewed against workers.

It's about acknowledging that the government remains intransigent, even on the smaller demands of the federation, such as a scrapping of the youth wage subsidy.

Their opponents refuse to contemplate the confrontation with the ANC that this implies. This would suggest that elite compacts to preserve the privilege of a union bureaucracy without substantive concessions to workers may not succeed, as the very basis of that privilege could be eroded by further splits and resistance from the rank and file.

But the other option – an economic re-engineering that would take on board the demands of the ANC's alliance partners – seems even less likely, as indicated by the national development plan's (NDP) call for a social contract in which workers "accept lower than their" productivity gains would dictate (meaning a further decline in the labour share of GDP).

Sidelining NGP
Cosatu's own discussion document on the NDP strips the progressive varnish to reveal an economic programme which sidelines the industrialisation-driven new growth path (NGP).

In its place, it proposes the same wage compression, export-led growth, this time with an added yearning for Adam Smith's capitalism of the butcher and the candlestick maker — over 90% of the 11-million jobs aimed at are expected to come from small, medium and micro enterprises (SMMEs) concentrated in the service sector.

This is despite convincing research that the service sector's fêted reputation as a driver of employment may have more to do with outsourcing from manufacturing than anything else, and that SMMEs have been net job destroyers.

The ANC's export-led growth has not worked in almost 20 years and the current global crisis makes its prospects even gloomier. Recent evidence of this – the ballooning corporate cash pile resulting from investment decoupling from profits – throws cold water on the social contractism of the NDP.

This is based on an Organisation for Economic Co-operation and Development 2013 country report, which includes Statistics South Africa data.

Any resolution to the crisis not premised on race-to-the-bottom economics will have to engage the notion of wage-led growth advocated by the United Nations Conference on Trade and Development and a number of influential economists.

Creating a wage-led economic regime
In the first place, this entails pro-labour distributional policies – plugging the lacunae in our labour legislation and bolstering unions – to reverse the decline in labour's share of new value creation.

Secondly, it means a thorough ongoing reconstruction of the institutional environment to create a wage-led economic regime, in which capital responds to the growing buying power of workers with productive investment and evolves to compete through innovation rather than wage repression.

Regulating and reforming the financial system to stop capital leaking abroad and instead channelling it to job creating investment is crucial.

The current high wage demands and the growing militancy of which they are an expression, aside from redressing what labour has lost from two decades of neoliberalism, could prove the unworkability of the current economic dispensation.

Labour, if joined to a more far-reaching political movement, perhaps spawned from the more radical sections of Cosatu, could compel a more just economic approach from the government.

Niall Reddy is a researcher at the Alternative Information and Development Centre

__________

Government tackles unemployment

SABC News, 17 June 2013

With youth unemployment at 70%, there are several government initiatives underway to get the country's young people working.

Young people make up the majority of South Africa's population and government needs to make sure that the youth is productive even those who drop out of school before matric. 

The National Planning Commission believes that even those without matric can still make it in the workplace with some assistance. "There's proof now that it is possible to take somebody who has left school without the kinds of capabalities in maths,comprehension and communication and scale up those core capabilities quickly, say over a 4 month period so that they can now be trainable, complete their studies and find work, " says National Planning Commissioner Miriam Altman.

Entrepreneurship has long been mooted as the solution for South Africa's slowing economy. Organisations like the Industrial Development job Corporation offers youth targeted programmes.  

Industrial Development Corporation's Shakeel Meer says: "We've set aside R1 billion from our Grow-E scheme for youth businesses. The Grow-E scheme is targeted at businesses which create jobs very efficiently and we want the youth to be part of the solution rather than everyone seeing them as part of the problem. So if a young person, someone below the age of 35 wants to start a new business above R1 million or grow an existing business, we'd look at supporting them out of that fund and it's at a very competitive rate at prime minus 3 if the jobs are being created efficiently."

It's expected that Treasury will soon implement the youth wage subsidy in some form -- its a controversial measure to help young people get into work, without the employer bearing all the cost.

Over a 3 to 5 year period, the initiative could reach about 175 000 people and while welcomed, experts say other measures also need to kick in.

Cosatu has warned that the masses of unemployed youth will one day erupt into South Africa's own Arab Spring.

__________

Motlanthe's mining pact and the rand

Peter Attard Montalto, Fin24, 14 June 2013

 

Deputy President Kgalema Motlanthe's day of talks with the mines and labour have resulted in a draft pact, but it's unclear what it will do to help stability (though full details are obviously still to be decided).

There is no commitment to avoid strike action and no more fundamental reassessment of the sector to make structural changes (like to migrant labour system), nor anything on majoritarian recognition - simply a call for engagement and non-violence. 

Overall, it's clearly not a bad thing to have this and the process has stalled the Association of Mineworkers and Construction Union's (Amcu's) Lonmin [JSE:LON]recognition strike for now at least. But we had similar agreements after Marikana and again in February to minimal effect, and there is nothing here really to alter the situation in my view. 

Indeed, news on Friday afternoon of a strike at Anglo Platinum [JSE:AMS] confirms that such pacts (so beloved by the South African government) are really worth very little and we need to see both real action and leadership through difficult choices and compromises on every side.

Overall, we think the government is still in what can be said to be largely a stalling exercise to hold the situation down until after the election – that will be the time when there is significant restructuring and job losses in our view. 

Looking at our previous list of factors to help restore investor confidence, we really are still not making any progress. 

President Jacob Zuma’s recent speeches have been better than the now infamous one two weeks back, but they still place the blame for rand volatility abroad and do not recognise the domestic idiosyncrasies that are to the fore in investors’ minds. 
 
The rand has consolidated down to lower levels, given very poor liquidity and very short-term and small positioning holdings by trading desks on the street. 

I still don’t think there is any meaningful rand positive retracement potential near term and all we can really say is that the rand-dollar will continue to increase in volatility around 10 (with upside bias in the cross).

*Peter Attard Montalto is  a director and emerging markets economist at Nomura. Views expressed are his own.

__________

New era for the job hunt

Xolani Mbanjwa, Fin24, 17 June 2013

 

Johannesburg - If you’re a young job-seeker who’s been sticking to the traditional way of looking for work by shoving your CV into a postbox or emailing it and hoping for the best then it’s time you changed tack.

Experts say job-seekers have a better chance of finding their first jobs through networks of friends, relatives and acquaintances.

A report by the Centre for Development and Enterprise titled Routes into Formal Employment found that young job hunters should learn the power of networking.

The report was derived from a study of 5 000 Cape Town youngsters between the ages of 14 and 22 who were interviewed about what they thought their chances of finding work would be when they entered the labour force.

The group, which included youngsters from different neighbourhoods and education levels, was first interviewed in 2002 and their responses showed they were overly optimistic about finding high-paying jobs.

The core of the group, those aged 18 in 2002, were interviewed again in 2007 and the report found that those who worked while studying increased their chances of becoming employed.

By 2007, aged 25, 67% of the group members were working, 12% were unemployed and ­actively looking for work, 14% wanted to work but were not looking actively and 8% did not want to work.

Those who had used connections – such as priests, school principals, neighbours, friends and relatives’ friends – found work. They mostly lived in urban areas and were considered “insiders”.

Centre for Development and Enterprise research and programme director Anthony Altbeker said jobseekers who lived with relatives who were also struggling to find work would be considered “outsiders” compared with those with a network.

“If an employer is looking for an unskilled worker today and is already employing a lot of people, according to our research, that employer will ask one of his trusted workers whether they have a relative who needs a job. The job search involving sending out CVs has been proven to be passive,” said Altbeker.

He said the much-maligned labour broking firms were vital in helping outsiders gain a “foothold” in the world of work, although most jobs were temporary.

The Centre for Development and Enterprise report found that young people typically found their first jobs - in restaurants, guesthouses, weekend craft markets and shops – through connections.

“Most urban insiders know people who can, and do, help them to find jobs. If they don’t, they will enquire directly at workplaces. Urban outsiders, by contrast, have few useful connections, are unlikely to enquire directly and rely on sending out CVs. This is a futile form of searching for a job,” said the report.

The report also said young people should use every chance to market themselves.

“Many have little or no access to social networks that could link them to job opportunities, partly because many have parents who have themselves been unemployed for substantial periods of time,” the report found.

“A growing number of young people are living in environments of multi-generational unemployment. Young people who find themselves in these situations are becoming increasingly resigned to never finding a job.”

So how can “outsiders” ­become “insiders”?

The report advises them to get realistic, develop a better understanding of how the labour market works and don’t just rely on sending out CVs.

Nazreen Pandor, chairperson of the Youth Employment Index, said any job-seeker needed to understand what their “value-add” would be and why they should be added to the company’s payroll.

She agreed that networking turned outsiders into insiders.

“It is important to be proactive. The youth should not be afraid to do internships and vacation work. In that way, they will be able to build relationships. Not all jobs are advertised through mainstream media. Some people get employed just through the power of networks.”

 - City Press

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Portuguese teachers boycott exams in anti-austerity strike

Reuters, LISBON, 17 June 2013

(Reuters) - Thousands of teachers across Portugalwalked away from final exams held at secondary schools on Monday to protest against planned spending cuts in education, leaving many pupils unable to take the tests, unions said.

The cuts are among the most recent austerity measures proposed by Portugal's center-right administration to meet the fiscal targets of an EU/IMF bailout. Portugal is in the third year of its worst economic recession since the 1970s and unemployment is at a record 18 percent.

Anti-austerity protests have been largely peaceful and more subdued than those in Greece and neighboring Spain but the country has seen a rise in rallies and strikes in recent months.

After talks with the teachers' unions collapsed over the weekend, the education ministry deployed replacement teachers to help invigilate and some schools bundled classes together in gyms or canteens so that the exams could go ahead.

Many pupils were unable to take the tests but in some schools they chanted and waved placards with slogans of solidarity for their striking teachers.

Mario Nogueira, the head of 52,000-strong Fenprof teachers' union, said 90 percent of teachers took part in the strike and that some schools had canceled Monday's exam. There are around 100,000 teachers in Portugal's state education system.

The education ministry said the strike affected less than a third of all pupils and rescheduled their exams for July 2.

Nogueira told reporters the union wanted to negotiate a solution to avoid pay cuts and a forced "mobility regime" whereby teachers may be forced to accept postings far from home or resign when their schools are merged with others as part of the spending cuts.

Exams are scheduled to go on for the coming weeks and union leaders have not ruled out more walk-outs.

Teachers are also protesting against a government decision to increase working hours for all public sector workers by one hour to an eight-hour day.

On June 27, unions will stage a general anti-austerity strike to further pressure the ruling coalition, whose popularity has dwindled after it enacted the largest tax increase in Portugal's modern history this year.

(Reporting By Andrei Khalip; Editing by Raissa Kasalowsky)

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2.          South Africa

Bafana Bafana lose World Cup qualifier

Johan Leroux, M&G, 17 June 2013
CAPE TOWN – It was bad news for Bafana Bafana as they lost their 2014 Soccer World Cup qualifying game2-1 against Ethiopia on Sunday afternoon. 

Bafana still have one game to play in September against Botswana but with Ethiopia’s win the SA soccer team not feature at the 2014 Soccer World Cup in Brazil.

The winners will go through to the next round of Qualifiers. 

Bernard Parker opened the scoring in the 34th minute but Ethiopia managed to equalise just before half time.

They entered the second half, with one goal each. 

During the second half Parker turned from hero to zero when he headed in an own goal for Ethiopia. 

And that is how the score remained. 

(Edited by Tamsin Wort)

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Teen raped on Youth Day

eNCA,17 June 2013

Moutse West - Mpumalanga police have reported that an 18-year-old girl was raped outside Dennilton on Youth Day.

According to Constable Lethunya Mmuroa, the girl was on her way to study at a house in the area on Sunday.

She was accompanied by a male teenage friend and on their way to the house, a man in his 20s allegedly stopped to offer them a lift.

While driving to their destination, the man stopped in some bushes and asked them to pay him.

"They told him that they don't have money, the suspect stopped the vehicle and took out [a] firearm," said Mmuroa.

The driver then instructed the boy to remain in the car and lie down and told the girl to get out of the car.

"He raped that girl outside his car," said Mmuroa.

The man then released the two and drove away.

A case of rape was opened and the girl was taken to the Philadelphia Hospital in Dennilton.

No arrests have been made.

-Sapa

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South Africa not in crisis - Kathrada

eNCA,16 June 2013

JOHANNESBURG - A close friend of Nelson Mandela said he was concerned about high levels of corruption but insists the country is not in crisis.

Ahmed Kathrada was commenting on the state of the nation at a Youth Day function in Johannesburg.

The anti-apartheid activist was sentenced to life imprisonment along with Mandela during the Rivonia trial in 1964.

“We still need him for as long as we can, because he remains an inspiration to the people, not only in South Africa but the world and we pray he is still with us for a long time,” said the struggle veteran.

However Kathrada insists the country is not in crisis.  

"The struggle was for a non-racial, non-sexist democratic South Africa, that is part of the constitution of the country. If the time comes where we depart from that, then I'll be concerned," he said.

The 84-year old said while he was concerned about the greed of some leaders, he had not lost hope.

“Ups and downs we'll have in any country. There are countries that have 300 years of democracy, they still got problems. We are only 19 years old, we'll still have our teething problems but we must deal with them. I’m not saying we must ignore them,” he said.

Kathrada called on the youth to participate fully in the building of the country.

“I don’t think the youth are taking full advantage, but on the other hand we also want the youth to take full part in culture and sport which was closed to them before. But they must never forget the biggest responsibility is to the country and that is where skills shortage comes in... that’s what they must concentrate on,” he said.

The struggle icon urged today’s youth to concentrate on the new struggle which includes unemployment, poverty and skills development. -eNCA

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SA must solve youth problems in honour of 1976 youth: Mapisa-Nqakula

Sapa, Times Live, 17 June 2013

The best way to honour the youth who died in 1976 is to solve problems facing the current youth of South Africa, Defence Minister Nosiviwe Mapisa-Nqakula said on Monday.

“The best way to honour them is to resolve many problems faced by the youth today which prevent them from realising their potential to be productive and fulfilled citizens,” Mapisa-Nqakula said in a speech prepared for delivery.

She was addressing a youth celebration in Riviersonderend in the Western Cape.

Mapisa-Nqakula said the main problems faced by the youth were high unemployment, endemic poverty, crime and substance abuse.

About 3.3 million youths were neither employed nor studying.

This was an unacceptable state of affairs which enjoined all South Africans to find lasting solutions, she said.

“What future does this country have if we do not invest in our youth and create conditions that offer opportunities for the realisation of their full potential?”  Mapisa-Nqakula said South Africa had to continue investing in education and skills development “but seek better results than are currently been achieved”.

She said “chronic” unemployment was the scourge that bred poverty, crime, substance abuse and the disintegration of families.   “My message to you is that we cannot afford to surrender to despair and helplessness. Together we can make sure that no one is written off as a hopeless case and left behind.”   Mapisa-Nqakula said government had a constitutional obligation to provide education and health to all citizens.

“But our youths also have to take personal responsibility to improve their circumstances. They must have the discipline, initiative and focus to conquer adversity and become productive citizens.”  She urged the youth to also consider careers within the defence ministry.

“We are currently looking at the enhancement of the force’s ability to stimulate local economic growth through various interventions and to assist communities in distress.”  Mapisa-Nqakula said the youth had to drive economic development and transformation needed for an inclusive economy that provided a better life for all South Africans.   “This is the only way we can truly honour all our youths who paid the ultimate price so that we may live as free men and women,” she said.

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South Africa has changed for the better, says Zuma

SAPA, M&G, 16 June 2013

·          

·         President Jacob Zuma has told a Youth Day celebration in KwaZulu-Natal that South Africa has changed for the better since 1976. "We have come a long way since 1976. South Africa has changed considerably for the better. We thank the youth for their sterling contribution to both freedom and the reconstruction of their country," he said.

Zuma said the government had prioritised youth development because the 2011 Census indicated South Africa was a youthful country.

"[The census] told us that for the next 20 years, South Africa will have over 14-million young people between the ages of 15 and 29. The number will peak in 2021, reaching 15.1-million."

Quality education was needed. The percentage of completed higher qualifications like certificates, diplomas, degrees and post-graduate qualifications increased from 7.1% in 1996 to 12.1% in 2011.

The percentage of those who had completed secondary or higher education increased from 23.4% in 1996 to 40.5% in 2011.

"This figure shows improvement, but it is still far from what we want for our country," the president said.

Sixty-five percent of the black youth was unemployed.

"Our education and development programmes are designed to correct these challenges."

Zuma urged young people to help in the fight against crime, drug abuse, xenophobia and other social ills.

"Thus our special message to the youth of the republic today, is that you must become an integral part of the struggle against all these cancers that are painfully eating our society," he said.

"We must fight the scourge with the same vigour that we fought apartheid and the zest that is displayed in our successful fight against HIV and Aids today." – Sapa

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Youth urged to uphold moral values

Lerato Makate, SABC News, 17 June 2013

Gauteng Sport, Arts, Culture and Recreation MEC Lebogang Maile has stressed the importance of moral regeneration among the youth.

He was speaking in Soweto at the department's launch of Youth Month. The month's activities will include the retracing of the June 16, 1976 march from Naledi High to Orlando Stadium, in commemoration of the struggle for freedom by the 1976 youth.

Maile said many young people in the country are getting involved in crime due to many challenges such as unemployment.

“We see on a daily basis and read about horrendous stories that are happening in our communities, where people kill the old citizens, the substance abuse, the crime, violence against women and children and all that. I think the youth today must pledge to work hard to ensure that society do away with acts of moral degeneration.”  

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How a small factory in Port Elizabeth conquered the world

Ray Hartley, Business Day, 16 June 2013

ACROSS the lake from the Nelson Mandela Bay Stadium in Port Elizabeth’s North End stands a factory that proves the conventional wisdom about South African manufacturing wrong.

The odds are stacked against the Eastern Cape. Years of government neglect have resulted in schools collapsing, the public health system plumbing the depths and roads deteriorating. An audit report last year showed that R9bn earmarked for education over the past nine years could not be accounted for. That is a billion a year “lost” by officials in South Africa’s least-competent bureaucracy.

None of this deterred Stephen Saad, CEO and a co-founder of the Aspen group, from creating a globally competitive business.

By going against the grain, he has over 15 years built one of the world’s premier pharmaceutical manufacturing facilities in the heart of Port Elizabeth. In 1998, Aspen listed at R2.40. These days it trades around R190, giving it a market capitalisation of more than R80bn. This makes it one of South Africa’s top 40 companies by size.

You would expect to find Mr Saad presiding over his company’s global production, distribution and sales operations from one of Sandton’s gleaming towers. Instead, he works from a modest two-storey block in an office park in Umhlanga Ridge, north of the Durban CBD.

If you put aside the exclusive address, it is the sort of office that a start-up desktop publishing business might choose after landing its first big contract.

In the head office boardroom, Mr Saad is quick to smile, quick with a joke and easy to get along with. But the facade conceals a driven, even predatory mindset. Where others see obstacles, Mr Saad sees competitive advantage and opportunity.

“If you look at the world, if you look at Japan — it’s got nothing. It’s a tiny, resourceless place with too many people on it. If you look at Africa with all its resources and its size — 20% of the world’s land and 15% of its population — do we think we can’t compete with them?

“You’ve got to be very clear in life about where you are going. If you want to lead people, you need a vision. People need to know there is hope. But to have that vision, you’ve got to face your reality. You’ve got to say: ‘I’ve actually got no skills in South Africa, so what am I going to do? Do I give up or do I develop the skills?’” he said.

A graduate of Durban High School and the then University of Natal, Mr Saad trained as a chartered accountant. He entered the pharmaceutical business through Quickmed and began a journey of restless acquisition and expansion. Quickmed merged with Covan to form Zurich, which was sold for R75m in 1993.

He served out his restraint-of-trade period by transforming the lossmaking Varsity College. It sold for R100m. Then Mr Saad returned to pharmaceuticals with the launch of a new company.

He wanted to give it a name that spoke of the future. Mr Saad liked the association that his old company, Zurich, had with snow and skiing. He wanted to bring the same fresh, clean image to his new company. He decided to call it Aspen.

His first move was to buy the moribund SA Druggists business for R2.4bn in 1999, a move he describes as “the biggest risk we ever took”. The makers of the Lennon range of homely remedies, it was a dinosaur of the apartheid era.

The traditional saw-tooth roof of the Lennon factory still stands on the Aspen precinct in Nelson Mandela Bay, a reminder of more Dickensian times when production took place using antiquated equipment for a small local market.

It is dwarfed by two new state-of-the-art facilities, known to the Aspen management as Unit One and Unit Two, which were constructed to take Aspen from small local producer to fierce global competitor. Between them, they produce 10 billion tablets a year for the world market.

Both units meet the highest global production standards. In addition to accreditation by the local Medicines Control Council (MCC), it has been approved by the US Food and Drug Administration, the UK medicines control authorities and a raft of other global bodies.

The tablets and medicines Aspen produces will be sold in 150 countries across the globe.

How Port Elizabeth came to be home to one of the world’s premier drug-manufacturing facilities is a story Mr Saad relishes telling.

After acquiring SA Druggists, it was decision time. “What we inherited was something so antiquated and out of date that it would battle to pass an MCC inspection.”

The possibility of renaming the group after the Lennon line of products was tossed around and rejected with what can only be described as “Durban boykie logic”. In the post-communist world, the association with “Lenin” was old-fashioned and negative, Mr Saad said with a chuckle.

The real challenge was how to make Aspen globally competitive while building a reputation for quality, a non-negotiable in the pharmaceutical industry. Though it was possible to produce in South Africa at 20% to 30% cheaper than in Europe, the real threat came from the East.

Mr Saad made regular trips to India, visiting Hyderabad, Delhi and Bangalore. The numbers were intimidating. “It’s quite daunting at first when people say they make tablets at X dollars a thousand and I know I can’t even turn my machines on for that.”

The Indians were manufacturing at $3 or $4 a thousand and packing for an additional $3 or $4 a thousand. Mr Saad pointed out a little-known fact about pharmaceuticals: the packaging — blister packs, inserts, boxes and so on — costs about the same as making the tablets themselves.

“You’ve got to put a tablet into a blister pack, you’ve then got to seal that blister pack, you’ve then got to put a package insert around it, then you’ve got to put it in a box. And that’s where all the expensive machinery is.”

By contrast, making tablets is relatively simple: “You take a powder, you wet it, you dry it, you compress it.”

“When we compared ourselves with Asia, we were more than twice as expensive. It was a real, real problem for us. We had to come up with a model. It’s no use being half competitive — you don’t want to be stuck in no-man’s land.”

The answer lay in volume — Mr Saad did the maths. A facility scaled up to produce a billion tablets would still not be competitive. “We needed 10-billion tablets. At five billion or six billion, we break even. To do that, you had to mechanise, you had to build for much more capacity than you had,” he said.

Unit One and then later Unit Two were built with the capacity to grow rapidly. “We built a very big building. We put in one machine, another machine ...”

The genius of it was that the costs — of the buildings, of the installation of air conditioning and of the basic machinery — were sunk up front. After that, new lines could be introduced based on demand without requiring fresh infrastructure.

The end result was a highly mechanised and flexible facility that Aspen has been able to constantly expand. “We are still adding machines as we speak — each time we add another machine with seven operators. It’s not hugely labour-intensive any more.”

To accomplish this, Aspen needed to develop an organisation that could jump through the many hoops to meet stringent quality expectations, but remain agile and adaptive.

Mr Saad counts leadership as Aspen’s primary resource. “And,” he added, “there is a very big difference between management and leadership. Leadership means you have to roll up your sleeves and work.”

He paused. “I’m going to say something very controversial here. Corporate South Africa is just a huge disappointment to me. I think corporate South Africa is hugely overpaid. If you’ve got to run a restaurant to make a million bucks and these guys are making R20m — I’d like to see them run 20 restaurants successfully before they ask for the R20m.”

He cannot hide his contempt for bureaucracy. “Take our factory of 10-billion tablets. To compete with us, a multinational will have 10 factories with a billion tablets from each, split across all sorts of geographies. They will have regional managers, managers of the regional managers at central and a huge head office structure.”

Mr Saad’s disdain for corporate management comes from his time working the street. “I started from nothing — I’ve dealt with entrepreneurs, guys who trade, guys who sell bottles, guys who sell cardboard, and I’ve always been impressed by their level of entrepreneurship. The way they trade, they know their businesses and they feel passion.”

General manager Chris Stubbs leads the team managing Aspen’s Unit One and Unit Two facilities. Sitting with his leadership team in his very ordinary office on the factory premises, he projected an intensity which seems to infect those around him.

The production facility succeeds, he said, because managers work together. “We just don’t fight.”

Seated around the table were key members of his team: operations manager Branson Bosman, quality assurance manager Karien Dutton and demand and operations planning manager Janine Mauritz. It is their job to align factory output with the constantly changing demand for new medicines. In his office, bureaucracy is a swear word. “There’s no hifalutin MBA quadrant analysis. We do what’s in front of our face,” said Stubbs.

“I can’t run a structure out of power, I have to run it as a collective. Inside Aspen, while there is respect for authority, there is no respect for structure,” he said.

Later he points out that at the factory, there is no boardroom and, he adds, “there is no executive dining room — bring your sarmies”.

There is an acute awareness of the fierce competition they face. Each manager works towards defined targets, which they know as “the number” — the point at which their output meets or exceeds that required to stay ahead of the competition.

“The philosophy here at Aspen is: get the job done,” said Mr Bosman, who is disarmingly young for someone charged with running a major industrial operation. Stubbs added quickly “and don’t wait for a medal”.

What Mr Stubbs strives for is “getting a consistent drumbeat going”.

Operational since 2004, Unit One was purpose-built to produce tablets according to the drumbeat with the help of gravity.

On the building’s top floor, the powdered ingredients of the drugs are poured into huge stainless-steel containers, which are mated to steel-lined holes through to a lower level. There they are mixed with other powders, wet and transformed into granules before going through to the next floor, where they are compressed into tablets. From there they are moved to the packaging facility. It operates 24 hours a day, using three shifts.

Between each floor is a “hidden” floor where the heavy technology to maintain air purity and temperature and to mix the powder is housed. It is accessible only from the outside to keep the sterile production facility away from the tramping boots of maintenance workers. On the morning that I visited, the night’s output of 17-million tablets wa s awaiting transport from the facility.

The staff who run this hi-tech operation were locally recruited. They have to have at least a matric qualification, and other jobs require technikon or university certificates. To fill the gaps in education, Aspen embarks on intensive on-the-job training.

Mr Saad said the quality of graduates was declining. “There was always a gap between theory and the real world. What we are finding is that the gap is bigger than in the past. There are guys who can’t even put the machine on. They don’t even know where the on-button is.”

What the staff lack in high-level skills they make up for in critical thinking. “That’s where South Africa is very strong — the ability to make a plan,” said Mr Stubbs.

He encourages creativity at the factory. “They are not human robots. Eastern Cape people want constant improvement and change. There’s a lot of creative passion.”

Aspen’s level of technical competence has risen dramatically. Mr Stubbs recalled that managers used to attend international conferences with wide eyes. “Most of our managers hadn’t been to Joburg, never mind London.”

“It’s not an arrogance, but we don’t buk (bow) any more,” he said.

South African workers are often described as unproductive. It is something that annoys Mr Saad. “I think there is more of a problem with South African management than with South African labour.”

In his experience, workers, “if treated properly and managed properly”, can radically improve their productivity.

“There are plenty of ways of improving productivity other than asking people to work harder — improved mechanisation, improved processes. Engineers need to be thinking and then you need to manage the whole chain to improve productivity,” he said.

When Mr Saad bought the old SA Druggists operation, his first meeting was with the trade union representative. It was an eye-opener.

“He said something to me which I will never, ever forget, because it was so foreign to me. He said: ‘How could I possibly ask the workers to be more productive? If they are twice as productive, you will need half as many jobs.’”

Mr Saad could not duck the reality, telling him: “Yes, there will be job losses, but if we get it right, we will increase and grow our jobs.” If his plan worked, workers who were laid off would return to a more successful company. And, he promised, workers would become shareholders.

Workers were given shares when they were priced at R4 each. Their value has grown 50 times. When the share hit R30, the union made a wise decision, using its provident fund to buy more shares. “The share price went up, so the provident fund went up and they had this huge equity interest. They’ve got billions in the company.”

The constant focus on productivity has led to a doubling of the number of employees. And, said Mr Saad, they are well paid, somewhere between the high pay of Europe and the low pay of Asia. “The problem with low-cost labour is that it makes you inefficient, no matter where you are,” he said.

His state-of-the-art factory in place, Mr Saad’s next battle was to find a market for the 10 billion tablets a year needed to be globally competitive. Aspen had to build a global market for “generics” — medicines made using expired patents, which suffered from a bad reputation with consumers. “You couldn’t get into private hospitals — the specialists just wouldn’t use your product,” Mr Saad recalled.

To fill the manufacturing capacity, Aspen began acquiring brands. Its competitive production costs offered multinationals such as GlaxoSmithKline an opportunity to extend the life of some of their products.

“Our production was so good here that we could buy products, reduce the cost of goods, increase the competitiveness of the product. We were able to extend product life cycles — even grow products that were previously dying,” Mr Saad said.

The breakthrough came when Aspen began manufacturing in co-operation with global pharmaceutical companies. The ace up its sleeve was its investment in building a facility approved by the US Food and Drug Administration.

When the US decided to invest billions in rolling out Aids drugs under its president’s Emergency Plan for Aids Relief — known as Pepfar — Aspen was able to offer cost-effective production located in one of the countries most profoundly affected by the epidemic.

“That changed the perception of the business and it really drove our business growth in South Africa. We could go in to specialists and they could feel comfortable using our products. We became a one-stop shop,” said Mr Saad.

By 2006, Aspen had become the biggest supplier of antiretroviral drugs in Africa, concluding distribution deals with Merck, Sharp & Dohme, Bristol Myers Squibb, Roche and Tibotec.

“We are globally competitive with Asia. We are right up there. Multinationals see this — ‘Gee, what’s Aspen doing, it’s worth partnering them.’” Success becomes self-fulfilling,” said Mr Saad.

After buying and turning around the Australian drug company Sigma, Aspen was able to brag that the name of one of its products was written on one in five scripts in Australia, second only to South Africa. At home, one in four scripts is for an Aspen product.

Getting Australian doctors to give his products a hearing was a battle. Then came a stroke of genius — multinational companies were forcing their reps to retire at 60.

Aspen hired the retired reps and suddenly the company had a way into surgeries across Australia. Mr Saad explained the logic. “Now you tell me, no matter how pretty the 19-year-old rep is — who are you as the doctor going to see first?”

Mr Saad’s approach is relentless expansion. Aspen is now involved in talks with the global giant Merck, which Mr Saad was reluctant to comment on because of a cautionary notice. But the same approach of analysing “detail, detail, detail” is being taken.

He has learnt something else from his dealings with Brazil. “South Africans are small change in corruption relative to Latin America. Of course, corruption’s bad, but the biggest problem here is competence. Incompetence is a bigger risk to this country than corruption.”

But Mr Saad does not dwell on risks. He has shown how, even in one of South Africa’s most economically depressed regions, it is possible to build a world-class manufacturing business that creates jobs. He expects his staff to work hard and constantly improve productivity. But, he said, there must be a balance between work, family and relaxation.

“When do you know when you’ve got it? When you laugh and you laugh out loud. You don’t want to look back in 10 years’ time and ask, ‘What did I do all that for? Did I do it for money?’ There’s got to be more to it than that.”

• This article was first published in Sunday Times: Business Times

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3.    Alliance

Malema accused of committing 'political suicide'

M&G Reporters, 16 June 2013

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·         Sport and Recreation Minister Fikile Mbalula says expelled ANC Youth League leader Julius Malema's plan to start a new party is "political suicide"."As a cadre, being trained by the ANC, forming a political party out of the ANC is political suicide. It is out of anger and not necessity," Mbalula told the Sunday Independent.

"Being disgruntled about individuals in the ANC cannot lead to the formation of a political party."

This week, Malema announced that he would establish a new political platform—the Economic Freedom Fighters (EFF).

Beeld newspaper reported that Malema sent out an email announcing his plans. In the email he apparently urged those interested in his venture to contact him via email or social networks. He also asked for proposals on how to collect money.

Mbalula told the Sunday Independent he had "no intention of joining anything".

Calling Malema's plans "political adventurism" Mbalula, himself a former ANC Youth League leader, said he was friends with Malema.

"And I will remind him that, friendship aside, it is my duty to defend the ANC."

Mbalula said he did not believe in "veering" away from the ANC.

"If it means I part ways with Julius on this, so be it."

Mbalula said Malema needed to be more patient: "His political decision is sad. Julius can bounce back as a solid leader, only if he can remain patient."

Limpopo premier Cassel Mathale, previously seen as a close Malema ally, told the newspaper that Malema's decision was unfortunate.

"We are going to be on the opposing side of the fence. It's unfortunate."

Meanwhile, Limpopo human settlements minister Clifford Motsepe, once also seen as a Malema ally, told the newspaper they could still be friends but he would not support his political ambitions.

"I am going to attend branch general meetings with my grandchildren and the day I die my coffin will be draped in black, green and yellow colours," Motsepe said.

Sustainable solutions
In a press statement this week, Malema said the ANC could never provide a sustainable solution to the country's developmental problems and condemned both the alliance partners and the opposition parties as ineffectual.

He called on South Africans to "stand up and be counted" and announced his intention to hold consultative forums and platforms across the country to discuss "what is to be done".

"[The] Economic Freedom Fighters believe that South Africans should stand up and be counted. As economic Freedom Fighters. We call on all South Africans committed to real change to submit the names, contact details and current political affiliation to the economicfre...@gmail.com," Malema said in the statement.

The man, who once claimed to be "prepared to die for [Jacob Zuma] ... prepared to take up arms and kill for Zuma", described the ANC as a party "committed to a right-wing, neo-liberal and capitalist agenda which has kept [the] majority of our people on the margins of South Africa's economy".

A day after the majority of the ANC Youth League's structures were disbanded by a national task team set up to reorganise the youth wing, Malema described the league as a "lap dog" sent to repeat what the ANC leadership has said.

In an apparent swipe at former youth league alumnis Fikile Mbalula and Malusi Gigaba, Malema derided "puppet youth league leaders", who had been rewarded with Cabinet posts and other perks.

Perhaps pre-empting further legal action against him, Malema also warned that "victimisation of those who are suspected of forming political alternatives in the ANC will increase with threats of arrests and possible manipulation of the justice system until imprisonment".

Malema has already set the agenda for the nature of the consultations, which would be focused on what he calls "base principles", including:

·         the expropriation of land without compensation;

·         the nationalisation of mines, banks, and other strategic sectors of the economy;

·         building state and government capacity, which will lead to the abolishment of tenders;

·         free quality education, healthcare, houses, and sanitation;

·         massive protected industrial development to create millions of sustainable jobs;

·         massive development of the African economy and advocating for a move from reconciliation to justice; and

·         open, accountable government and society without fear of victimisation by state police.

These principles largely mirror the principles of the youth league in the latter years of Malema's leadership. He called on those who uphold these principles to make submissions on what should be done via email, Facebook or Twitter.

'Neglecting the struggle
Malema is targeting at least five-million voters in next year's general election, hoping to unseat the Democratic Alliance as the official opposition party.

Former youth league spokesperson Floyd Shivambu told the Mail & Guardian this week that starting a political party was a done deal. He said the plan had been on the table for some time, "particularly with calls from comrades who say we can't neglect the struggle for economic freedom".

Malema and Shivambu were among the youth league leadership who gave prominence to a debate about the nationalisation of mines and other key sectors of the economy.

"We believed that we could have that [successfully fighting for radical economic transformation] happening in the ANC or non-governmental organisations [NGOs] and any other structures that would contest around those demands," Shivambu said. "But then we decided to consult broadly and the dominant view is that we should start a political party."

Targets
Although it was unprecedented for any new political party to aim for almost half of the votes the ANC received in the previous elections (11.6-million in 2009), Shivambu said the EFF had undertaken extensive research that had shown it was possible. "There are a huge number of disgruntled people who are not going to vote; they're registered but they're not voting. That's who we are targeting."

Among the opposition parties, the DA garnered 2.9-million votes in the previous election and the Congress of the People, formed six months before the election, scored 1.3-million votes.

Malema's home province, Limpopo, and North West have emerged as two key provinces for the EFF. Shivambu said the EFF had received positive responses from several other provinces, including KwaZulu-Natal.

Shivambu said that by Wednesday, the EFF had received 2 800 responses from supporters who had also offered to be the party's volunteers.

"We will publish the names next week. Those who'll say we included them by mistake must tell us and we will remove their names. We want courageous people."

Shivambu said 55% of the respondents were currently ANC members. "The rest are people who say we had sympathy for the ANC and now that there is a plan for a new party we are prepared to join."

Economic transformation
He said the new party would try to attract unions—independent and those affiliated to the ANC's ally, the trade union federation Cosatu - as well as NGOs and any organisations that share the principles of radical economic transformation.

Political analyst Tinyiko Maluleke said there was space for a youth-driven political party to prioritise young people's struggles. "They're not finding jobs; some are qualified but are still unemployed, while some are not even getting opportunities to study and develop themselves."

The unemployment rate in South Africa reached 25.2% in the first quarter of this year, according to Statistics South Africa. Young people make up 70% of that figure.

Maluleke said the case for a youth-driven party was justified by the average age of the country's population—25—and that slightly more than a third of the population was under the age of 15, according to Census 2011.

According to Stats SA's 2012 mid-year population estimate, almost six-million citizens will become eligible to vote for the first time next year.

Shivambu said the EFF did not want to "name drop" but claimed the new party had already attracted prominent people. "We won't make their names public – they will make the announcement themselves when the time is right."

"The target is not big guns, anyway, the focus is on ordinary people on the ground."

He would also not say how the party would be funded or who its leader would be. "We're waiting for a fundraising strategy but we don't want foreign money. We think people should decide where money should come from."

He said those attending a consultative meeting, scheduled for next week in Johannesburg, would decide who would lead the party.

Shivambu said no alliances had been formed with other African countries but the EFF was looking to some such as Zimbabwe, Ghana and Uganda, "who are pushing a progressive agenda".

Malema owed the taxman R16-million and a number of his assets have been seized to pay off his debt. His Schuilkraal farm was auctioned for R2.5-million on Monday. Last month his incomplete Sandown mansion was auctioned for R5.9-million.

Malema also faces charges of fraud and corruption related to tenders in Limpopo. – Additional reporting by Sapa

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4.    International

Cameron urges G8 leaders to draw inspiration from hosts N Ireland

Shawn Pogatchnik, M&G, 17 June 2013

·          

·         Britain's Prime Minister David Cameron says G8 leaders should be inspired by Northern Ireland when the summit delivers its own economic breakthrough.

·          

·          Cameron said leaders gathering Monday for the summit should reach speedy agreement on trade and tax reforms, and draw inspiration from the host country's ability to resolve its own stubborn conflict.

Speaking hours ahead of the summit's official opening at a lakeside golf resort, Cameron said he expects formal agreement to launch negotiations on a European-American free trade agreement. He said a pact to slash tariffs on exports would boost employment and growth on both sides of the Atlantic.

"This will be a summit that will drive growth and prosperity all over the world," Cameron declared as he arrived at the summit venue ahead of leaders from the United States, Canada, Russia, Germany, France, Italy and Japan as well as the 27-nation European Union.

Referring to Northern Ireland's ability to leave behind a four-decade conflict that claimed 3 700 lives, he said leaders of the group of eight wealthy nations should be inspired by the setting – the lush lakelands of County Fermanagh – to deliver their own economic breakthrough.

"Ten or 20 years ago, a G8 in Fermanagh would have been unimaginable. But today Northern Ireland is a very different place ... a symbol of hope to the world," Cameron said.

Catholic-Protestant reconciliation
Obama, seizing on that theme, was beginning his trip in the Northern Ireland capital of Belfast, where he was delivering a speech on sustaining Catholic-Protestant reconciliation 15 years on from the US-brokered Good Friday peace accord.

The US leader was scheduled to speak inside Belfast's Waterfront Hall, a glass-fronted building that would never have been built during the city's long era of car bombs that ended with a 1997 Irish Republican Army cease-fire.

But with IRA splinter groups still active today, Northern Ireland's police appear to be leaving little to chance in ensuring security around the Lough Erne resort west of Enniskillen.

More than 3 500 officers from Britain have been imported to double the security detail, and British Army engineers have helped to erect a daunting perimeter of steel fences and coiled razor wire for kilometres around the resort's lone road entrance.

Air space over much of Northern Ireland is being restricted to summit traffic for the duration of the summit, which concludes on Tuesday. Meanwhile, the water around the resort's peninsula has been similarly closed to civilians, with police patrolling by boat, although the public is still free to fish from shore.

And Northern Ireland's riot-savvy police have been deployed in armoured vehicles and flame-retardant suits. They're keeping massive mobile water-cannon vehicles in reserve, lest hard-left protesters make any serious bid to breach the security fence.

However, the police commander of G8 security Assistant Chief Constable Alistair Finlay, said he expects peace to reign when socialist and anti-globalisation protesters march on Monday night from central Enniskillen to the fence.

Manage crowds
Finlay said while officers had trained to manage crowds of more than 10 000 protesters, this was unlikely to materialise on Monday, with just 2 000 expected and few anti-G8 activists travelling from continental Europe for the occasion.

As the protesters march, G8 leaders are due to hold a working dinner where foreign policy issues – especially the increasingly opposed positions of the United States and Russia over Syria's civil war – will be on the menu.

Obama was expected to hold a bilateral meeting with Russia's President Vladimir Putin before that dinner. Obama last week announced that the United States would begin arming rebel groups trying to oust the Russian-backed government of Bashar al-Assad.

Cameron said he also hoped to achieve agreement that no G8 member should pay ransoms to secure the release of hostages in North Africa, where western and Asian workers are top targets for kidnappers. – Sapa-AP

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Zuma congratulates Iran’s new leader

Staff Writer, Business Day, 17 June 2013

PRESIDENT Jacob Zuma has congratulated Iran’s newly elected leader Hassan Rohani, the Department of International Relations and Co-operation said on Monday.

"President Zuma extended his congratulations and best wishes to president-elect Rohani and the people of the Islamic Republic of Iran and expressed the hope that relations between South Africa and Iran would be consolidated under his leadership," the department said in a statement.

Mr Rohani will succeed current president Mahmoud Ahmadinejad in August after being elected as the new president on June 14 after he won more than 50% of the votes.

The moderate 'sheikh diplomat'

Analysts see the election of the moderate Rohani as a game-changer, which could set a new tone and soothe tensions with the West over Tehran’s disputed nuclear programme.

His policies under reformist president Mohammad Khatami were abandoned in 2005 when President Mahmoud Ahmadinejad was elected and Mr Rohani quit his post over differences.

Dubbed a 'sheikh diplomat' for his negotiating skills in tortuous nuclear talks, the moderate cleric raised hopes internationally after he emerged as the victor of the key polls on Saturday.

Nuclear stalemate

Mr Rohani has vowed to end the nuclear stalemate that has led to crushing Western sanctions on Iran.

As far as Iran’s nuclear programme was concerned, Mr Zuma requested Mr Rohani give priority to resolving all outstanding issues with the International Atomic Energy Agency.

"Doing so would not only allow Iran to reclaim its rightful place in the international community but it would also result in the lifting of international sanctions, which has caused immense hardships to the Iranian people," the department said.

On the contentious nuclear issue, Mr Rohani said the US must recognise Iran’s nuclear rights and pledge not to interfere in its internal affairs before direct talks between the two countries can take place.

"The issue of relations between Iran and America is a complicated and difficult issue," Mr Rohani said on Monday. "It is an old wound that needs to be ... healed," he said.

Iran was ready to show more transparency on its nuclear programme but was not ready to suspend uranium enrichment, he said.

"Our nuclear programmes are completely transparent. But we are ready to show greater transparency and make clear for the whole world that the steps of the Islamic Republic of Iran are completely within international frameworks," said Mr Rohani.

A sign of warmer ties

In his first news conference after Friday’s presidential election, Mr Rohani extended a hand of friendship to all the nations of the world, pledging to revive constructive interaction with the world.

"Your government ... will follow up national goals ... in the path of saving the country’s economy, revive ethics and constructive interaction with the world through moderation," said Mr Rohani after Friday’s presidential election.

A new opportunity had been created for friendly relations between the Islamic Republic and the world, and he hoped all countries would take the opportunity to build friendly relations.

"I hope that all countries use this opportunity," he told his first news conference after Friday’s presidential election.

The joint commission between South Africa and Iran is scheduled to take place in Pretoria on October 10 as a mechanism to consolidate relations and exchange views on international and regional developments.

Sapa, with Reuters

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Mining Firms Face New Regulator Scrutiny Amid Deal Probes

Matthew Campbell & Jesse Riseborough, Bloomberg, 17 June 2013

For an industry that routinely makes multi-billion dollar deals with developing-world governments and an array of sometimes controversial leaders, the mining sector has been remarkably free of political scrutiny.

No longer. World leaders gathering in Northern Ireland for the Group of Eight summit beginning today have mining transactions and companies in their cross hairs. They are proposing tighter oversight by requiring companies to disclose all payments made to foreign governments. The new rules, aimed at exposing corruption, come as U.S. and British regulators probe mining companies including Eurasian Natural Resources Corp. (ENRC) and a firm backed by Israeli billionaire Beny Steinmetz.

Open pit excavations at Comide SPRL's Mashitu copper mine, operated by Eurasian Natural Resources Corp., are seen in this aerial view in Katanga province, Democratic Republic of Congo. The new rules, aimed at exposing corruption, come as U.S. and British regulators probe mining companies including Eurasian Natural Resources Corp. Photographer: Simon Dawson/Bloomberg

The spotlight may change how mining groups, which have participated in $524 billion of takeovers since 2008 according to data compiled by Bloomberg, make deals worldwide, restraining acquisitions of assets tainted with allegations of bribery or corruption. It may also put new assets in play as mining companies under legal pressure look to sell projects or, in extreme cases, have them seized.

“Mining has been caught in the headlights in the past few months,” said Raj Karia, a partner in London at law firm Norton Rose Fulbright. For deals in the sector as a whole, “the environment has changed,” he said. “There is more need now to be very sure of what you’re buying, and aware of the history of an asset.”

Britain and the European Union are pushing for new laws that require mandatory disclosure by petroleum and mining companies of all payments including taxes and licensing fees to governments and officials, and for developing countries to report all resource revenues in a standardized way.

Lift Veil

The goal is to “lift the veil of secrecy that too often lets corrupt corporations and officials in some countries run rings around the law,” British Prime Minister David Cameron wrote last month.

The U.S. Securities and Exchange Commission adopted similar disclosure rules last year as required by the Dodd-Frank Act. The measures are being challenged in court by entities including the American Petroleum Institute on the grounds that they disadvantage U.S. companies against foreign-owned ones.

BHP Evidence

BHP Billiton Ltd. (BHP), the world’s largest mining company, said it has provided evidence to authorities investigating alleged breaches of anti-corruption laws, including the SEC. It began an internal inquiry in 2009 following an SEC request for information related to dealings with foreign officials, including Chinese dignitaries.

“The group is cooperating with the relevant authorities and reporting the facts found in the investigation,” BHP said today in an e-mailed statement. “It is not possible at this time to predict the likely outcomes of the matter.”

The Melbourne-based company declined to say which other authorities it was liaising with, or offer details of specific allegations being investigated.

BHP is the subject of a joint U.S.-Australian bribery probe examining its multimillion-dollar hospitality and sponsorship program at the 2008 Olympics, The Age newspaper reported in March. Projects in Cambodia and the Philippines are also being studied in the inquiries, the Sydney Morning Herald reported.

Canada, home to the world’s largest number of mining-company listings, will also impose mandatory reporting standards, Prime Minister Stephen Harper said last week. While penalties for failing to disclose payments aren’t yet established, the filings will provide greater transparency to fight corruption, he said.

Pursuing Bribes

The efforts represent a change to the governments’ relatively hands-off approach to the mining industry. Until recently, there’d rarely been a major investigation of a mining company under the U.S. Foreign Corrupt Practices Act. That law prohibits “the payment of bribes to foreign officials to assist in obtaining or retaining business” worldwide, according to the SEC, and can be applied to companies that aren’t based in the U.S.

Even in the U.K., home of mining giants including Rio Tinto Group, the Serious Fraud Office has focused its efforts on probing deals in the defense and energy sectors, largely avoiding mining. An SFO spokesman declined to comment. Rio Tinto said in a statement last week that it’s supportive of Cameron’s efforts to increase oversight of the industry.

This year there has been plenty to scrutinize. A British shareholder group has called for an investigation of Bumi Plc (BUMI), the product of a $3 billion 2011 deal between a company controlled by financier Nathaniel Rothschild and a pair of Indonesian coal exporters.

Unwinding Bumi

London-based Bumi on May 31 said a review of its accounts found about $201 million of spending at one unit for which there was “no clear business purpose.” An independent probe at the company’s other investment, coal exporter PT Bumi Resources (BUMI), followed the discovery of “irregularities” in September of last year.

The findings have led Bumi to seek to unwind part of the deal that created it by splitting into two entities. One will be controlled by Indonesia’s billionaire Bakrie family and listed in Jakarta, while Bumi keeps its 85 percent holding in PT Berau Coal Energy (BRAU), remaining listed in London. As part of an effort to recover missing funds, it’s in talks with Indonesian regulators as well as the U.K.’s SFO.

Opt Out

To avoid potential future controversy, big mining companies may simply choose to steer clear of countries with questionable deal-making histories, said Paul Gait, a mining analyst at Sanford C. Bernstein Ltd.

“The real victims in all of this are those developing countries with a significant resource endowment that are going to find it harder to access capital because of the alleged criminal behavior of certain mining companies,” Gait said.

In particular, deals with middlemen who obtain mining assets from governments, and then sell them to international mining groups, may get an especially cool reception, said Tim Bush, the head of governance and analysis at the U.K.’s Pensions Investment Research Consultants shareholder group.

“In a proper free, fair, transparent market such intermediaries shouldn’t have a role,” he said. “They’re there to oil the wheels un-transparently.”

U.S. prosecutors are examining a deal between BSG Resources Ltd., a company linked to Israel’s Steinmetz, and Guinea’s government to obtain part of the Simandou iron-oreconcession, which was later re-sold to Vale SA for $2.5 billion.

Glencore Xstrata

BSGR denies wrongdoing, and has argued the Guinean government is trying to strip the company of the concession. If that occurs, it could spur a race among mining companies like Rio and Vale to increase their ownership of the asset, part of the world’s richest undeveloped iron-ore deposit, said Liberum Capital analyst Richard Knights.

Meanwhile ENRC’s legal troubles, which also include an SFO probe of suspected bribery at its operations in Kazakhstan, may similarly put significant new assets into play.

The three billionaires who control the company are seeking to take ENRC private in the wake of investigations that have helped wipe more than $4 billion from its market value. After the deal, they may seek to break up the company, selling off assets to suitors that could include Glencore Xstrata Plc (GLEN), according to people familiar with the situation. Analysts at Nomura Holdings Inc. value the firm’s Kazakh business at more than $11 billion and its African unit at $1.8 billion.

A spokeswoman for ENRC declined to comment.

Still, a broad range of mining assets are for sale for more prosaic reasons as resource firms look to unload less-promising projects amid weakening commodity prices, reducing demand for those with uncertain histories.

Fewer Deals

So far this year global mining takeovers have totaled just $24.3 billion, compared with $93 billion in the same period in 2012.

Rio Tinto is considering a sale of at least part of its coal business in Mozambique, which it acquired for $4.1 billion in 2011, after flagging a $3 billion writedown of the value of the project, a person familiar with the matter said in January. Glencore is also seeking buyers for its Las Bambas copper development in Peru, which could fetch as much as $10 billion.

The broad crackdown on the mining sector is part of the hangover of the last commodities boom, which saw prices for minerals like iron ore and copper jump on the back of Chinese economic growth, said Robert Talbut, who heads the investment committee of the Association of British Insurers. It represents some of the U.K.’s largest institutional investors.

“There was a sense that because the sector was hot you were prepared to severely compromise on due diligence,” Talbut said. “Maybe the experience of the past 18 months or so shows that if you take shortcuts simply because a sector is hot, the chickens can come home to roost.”

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Economic week ahead: All eyes on the Federal Reserve

Matt Quigley, M&G, 17 June 2013

·          

·          

The US Federal Reserve’s two-day policy meeting will set the tone for global markets this week as leaders of the G8 gather for a summit in Ireland.

The Federal Reserve’s meeting on Tuesday and Wednesday will set the tone for global markets this week. When will the central bank begin to pull back on its quantitative easing programmes? Markets will get further clues on Wednesday.

Elsewhere in the world, investors in Europe and Asia will be on the look-out for a series of manufacturing snapshots and, in Africa, central bank decisions are expected from Mauritius, Morocco, Namibia and Ghana. Here is your guide to the week ahead:

United States
America’s central bank – the Federal Reserve – has kept its target for overnight lending between banks at almost zero since December 2008 and is buying $85-billion of treasury and mortgage-backed securities every month in a bid to boost growth in the world’s largest economy. Fears that this massive stimulus programme may soon come to an end has sent markets into a tizzy.

Although the bank is highly unlikely to make any substantive changes in policy at this week’s meeting, chairperson Ben Bernanke and his colleagues on the Federal Open Markets Committee are likely to try to reassure markets that the decision to taper the central bank’s quantitative easing programme and raise interest rates will be data dependent and gradual. The punch bowl will be drained, not taken away.

In addition to Bernanke’s post-meeting press conference on Wednesday, economists and investors will pay close attention to the revised economic projections released after the two-day meeting concludes. Most analysts believe that policymakers will downgrade their 2013 growth and inflation numbers slightly.

Beyond the Federal Reserve’s meeting, US markets will monitor a series of economic data releases over the coming days.

On Monday, investors will watch for the Federal Reserve Bank of New York’s Empire State manufacturing survey and the National Association of Home Builders’ housing market index.

On Tuesday, last month’s consumer inflation and housing starts figures will take centre stage.

Finally, on Thursday, weekly jobless claims figures, May’s existing home sales figures and the Federal Reserve Bank of Philadelphia’s closely followed regional manufacturing gauge will dominate.

Europe
Leaders of the G8 – the world’s eight largest economies, excluding China and Brazil – will gather in Northern Ireland on Monday and Tuesday for a summit. The state of the world’s economy, the situation in Syria and programmes aimed at combating tax avoidance are expected to top the group’s agenda.

Germany’s Centre for European Economic Research – Zentrum für Europäische Wirtschaftsforschung – will release its closely followed economic sentiment indicator on Tuesday. Economists expect the index – based on a survey of roughly 350 analysts – to improve to a reading of 37.8 from last month’s 36.4. Any reading above zero indicates optimism.

European markets will likely take their cues largely from events in America on Wednesday. But on Thursday, attention will turn back home for a series of purchasing managers’ index (PMI) releases.

Economists expect flash PMI results covering the services and manufacturing sectors of most of the continent’s largest economies to remain below the key 50-mark separating expansion from contraction. The composite PMI for the 17-member eurozone as a whole is expected to edge up slightly, from 47.7 in May to 48 in June.

Thursday will also bring the UK’s latest retail sales figures. Markets expect the numbers to show that broad sales – including autos and fuel – rose 0.8% in May from April, an improvement on April’s 1.3% decline from March. Excluding autos and fuel, sales likely rose 0.9% on a monthly basis in May.

Asia
On Tuesday, investors will be paying close attention to the Reserve Bank of Australia (RBA)’s release of the minutes from its most recent monetary policy meeting. Markets will be looking for hints at the prospect for further easing.

The RBA held firm on rates earlier this month after cutting them in May. Most economists are expecting officials to reduce rates further over the coming months amid concerns that the continent’s economy is slowing. The central bank has cut its benchmark rate by 200-basis points since late-2011.

On Wednesday, Japan will release May’s trade data. Most economists expect high energy imports to outpace exports in Asia’s number two economy, leading the country to post an 11th consecutive monthly trade deficit.

The median forecast among analysts surveyed by Market News International is that May’s deficit will swell to ¥1.169-trillion, its highest level since January’s ¥1.634-trillion gap. Exports are expected to have risen 7.1% from a year earlier, up from a 3.8% rise in April. Imports are likely to have increased 10.8%, up from a 9.5% rise in April.

On Thursday, attention will shift to China for the release of the HSBC China manufacturing PMI. Markets expect the forward-looking index to slide deeper into contraction territory. The median forecast of analysts polled by Reuters is for a reading of 49.2, down from 49.6 in May.

Finally this week, governor Haruhiko Kuroda of the Bank of Japan will deliver remarks to Japan’s National Association of Shinkin Banks on Friday. Kuroda has been criticised recently for failing to calm volatile bond markets, so his comment will be closely watched by investors.

Africa
Central bank decisions in Mauritius, Morocco, Namibia and Ghana will dominate Africa’s economic calendar this week.

Mauritius’ central bank will announce its latest rates decision on Monday. Economists expect officials to leave the bank’s 4.9% benchmark lending rate unchanged.

Consumer inflation in the island economy decreased to a year-on-year inflation rate of 3.7% in May from 3.8% in April. Almost two-thirds of respondents to a recent central bank survey expect annual inflation to remain below 4.5% by year’s end. With inflation under control, policy is likely to continue to favour stimulating economic growth over the coming months.

Morocco’s central bank – the Bank Al-Maghrib – will announce its quarterly rates decision on Tuesday. With inflation pressures limited, officials are likely to leave the bank’s key policy rate unchanged at 3%.

The Bank of Namibia’s policy announcement will follow on Wednesday. Governor Ipumbu Shiimi said last month that inflation would need to reach double-digits for a “consistent period” before he would consider interest rates and most economists suspect that Namibian officials will not tighten policy until their counterparts in neighbouring South Africa do so.

Officials in Ghana are also expected to announce their rates decision this week. The Bank of Ghana raised its policy rate by 100-basis points to 16% last month and, given continued upward inflation risks and pressure on the cedi, is widely expected to continue its tightening stance.

Consumer inflation in Ghana accelerated for the fourth consecutive month in May, increasing to its highest level since April 2010. Price pressures have mounted in recent months due to lower fuel subsidies, a weakening local currency and high levels of government spending.

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Turkey could deploy army to quell protests

Jonathon Burch and Daren Butler, Reuters, 17 June 2013

ANKARA/ISTANBUL 

(Reuters) - Turkey's deputy prime minister said on Monday the armed forces could be called up if needed to help quell popular protests that have swept Turkish cities in the last two weeks, the first time the possibility of a military role has been raised.

Bulent Arinc made the remarks in Ankara, where 1,000 striking trade union workers faced off briefly against police backed by several water cannon, before police retreated and the crowd dispersed.

In Istanbul, the cradle of protests that have presented Prime Minister Tayyip Erdogan with the greatest public challenge to his 10-year leadership, several hundred union members also marched in sympathy with the anti-government protests.

Police prevented them entering Taksim Square, the focus of the unrest, which flared up again at the weekend with some of the fiercest clashes so far when police fired teargas and water cannon to clear thousands of people, some of them throwing stones, from the square.

"Our police, our security forces are doing their jobs. If it's not enough, then the gendarmes will do their jobs. If that's not enough ... we could even use elements of the Turkish Armed Forces," Arinc told Turkey's state-run TRT television.

Any use of the army would be a dramatic step in Turkey, where Erdogan has pushed through democratic reforms including taming a military that toppled four governments in four decades.

Monday's marches were peaceful but small compared with many of the recent protests, and, while it was unclear how many of the 850,000 or so public workers answered their unions' call to strike on Monday, there were no signs of major disruption.

Police detained 441 people in connection with the clashes in Istanbul on Sunday and 56 in the capital Ankara. As violence across several cities entered its 18th day, at least four people have been killed and around 5,000 injured, according to the Turkish Medical Association.

What began as a small demonstration by environmentalists upset at government plans to build on a public park adjoining Taksim has grown into a movement against Erdogan, who opponents say is overbearing and meddles too much in their personal lives.

"TIRED OF INTERFERENCE"

"We are tired of protesting, we don't want to keep doing this, we want to return to our lives - but we are tired of this oppressive government constantly interfering," said Mahmet Cam, a teacher among the striking workers in Ankara.

There were also clashes on Monday in the city of Eskisehir, around 200 km southeast of Istanbul, where police used teargas and water cannon to disperse crowds and cleared away hundreds of tents, the Dogan news agency reported.

European Union enlargement commissioner Stefan Fuele expressed concern about developments in Turkey, whose negotiations to join the bloc have stalled, partly over worries about its record on human rights and freedom of speech.

"Turkey needs de-escalation and dialogue, not continuation of excessive use of force against peaceful protesters. We watch with concerns," he tweeted.

Germany has long harbored doubts about admitting Turkey to the EU. Chancellor Angela Merkel said she was "appalled, like many others" at Turkey's tough response to the protests.

"I would like to see those who ... have a different opinion and a different idea of society having some space in a Turkey that moves into the 21st century," she told the German broadcaster RTL.

"What's happening in Turkey at the moment is not in line with our idea of the freedom to demonstrate or freedom of speech."

Erdogan sought to seize the initiative over the weekend by holding huge rallies in Istanbul and Ankara. Hundreds of thousands turned up to support a leader who has won three successive elections, and whom they considered unfairly under siege.

The blunt-talking 59-year-old said the rallies were to kick off campaigning for local elections next year and not related to the unrest, but they were widely seen as a show of strength.

A defiant Erdogan told a sea of flag-waving supporters in Istanbul on Sunday that the unrest had been manipulated by "terrorists" and dismissed suggestions that he was behaving like a dictator, a constant refrain from protesters on the streets.

Just a few kilometers away, police fought running battles with protesters in clashes that lasted well into the evening.

The stark contrast between events in different parts of Istanbul highlighted how the protests have polarized Turkey, its conservative religious heartland largely backing Erdogan while Western-facing liberals swell the ranks of the protesters.

(Additional reporting by Seda Sezer, Can Sezer, Asli Kandemir in Istanbul, Jonathon Burch and Humeyra Pamuk in Ankara; Writing by Mike Collett-White)

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Turkish Unions March to Protest Police Crackdown in Istanbul

Selcan Hacaoglu & Firat Kayakiran, Bloomberg, 17 June 2013

Thousands of Turkish workers went on strike and marched in Istanbul and Ankara in support of protesters, as political turmoil in Turkey entered its third week after a police crackdown.

Union members gathered in Kizilay Square in the capital today after Interior Minister Muammer Guler said no “illegal” demonstration would be allowed. The marchers were blocked by armored police vehicles with water cannons, though there was no immediate confrontation and the rally broke up peacefully according to the official Anatolia news agency. In Istanbul, the strikers gathered near Taksim Square and their route there was cordoned off by police, also without any initial clashes.

A police armored vehicle approaches a makeshift barricade setup by demonstrators, during clashes between protesters and riot police in Ankara on June 16, 2013.

The protest movement has broadened from an environmentalist rejection of proposals to build in Istanbul’s Gezi Park into a wider movement targeting Prime Minister Recep Tayyip Erdogan’s Islamist-rooted government for what demonstrators say is its increasingly authoritarian approach to dissenting views and different lifestyles. Photographer: Aris Messinis/AFP via Getty Images

Istanbul, Turkey’s biggest city and commercial capital, saw some of the worst violence yesterday since the protests began on May 31, as police clashed with demonstrators in several districts after driving them out of Taksim the previous day. Guler said 393 people were detained yesterday. Prime Minister Recep Tayyip Erdogan rallied his own supporters in an Istanbul suburb and told a crowd of hundreds of thousands that those behind the unrest will be made to pay.

‘Democratic Reaction’

The protest movement has broadened from an environmentalist rejection of proposals to build in Istanbul’s Gezi Park into a wider movement targeting Erdogan’s Islamist-rooted government for what demonstrators say is its increasingly authoritarian approach to dissenting views and different lifestyles. His response, a security crackdown, has drawn condemnation from the U.S. and European Union and sent Turkish financial markets reeling. Stocks (XU100) and bonds extended losses today.

Labor groups representing about 800,000 workers called today’s action to protest the government’s “aggressive” policies.

Kani Beko, head of the Disk trade union confederation, said in Istanbul today that workers gathered to call for an end to “oppression and persecution.” He said if the government “doesn’t stop its war against the people, we will continue to take our democratic reaction to the squares.”

Guler warned that civil servants and workers taking part in illegal demonstrations “will have to accept legal consequences” for their actions. The Istanbul governor’s office said calls for a rally in Taksim are illegal and “won’t be tolerated.”

‘Substantial’ Risk

“The risk of an escalation of the crisis, which could pave the way for more clashes and unrest, is now substantial,” Wolfango Piccoli, an analyst at political-risk assessor Teneo Intelligence inLondon, said in an e-mailed report. “Despite the government’s heavy-handed approach, there is little prospect of an imminent end to the protests.”

Guler said police are also pursuing people who have disseminated false information about the protests on social media, and the government may introduce legal restrictions on such Internet activity.

Erdogan has won three elections with a growing share of the vote, reaching 50 percent in 2011. Many protesters say that the prime minister has used his majority to override their concerns. As well as police violence, they cite curbs on alcohol and increased attention to religion at schools.

Erdogan has rejected the charge, saying he governs on behalf of all Turks, and accuses opposition parties of backing the protests because they couldn’t beat him at the ballot box. He has urged supporters to answer the demonstrators by delivering him an election win in local polls due in March.

‘Will of Nation’

At his rallies in Istanbul yesterday and Ankara the previous day, he said the huge crowds he drew were a better representation of Turkey than the protesters in Istanbul and other cities.

“We won’t let these people hijack the will of the nation,” Erdogan told supporters in Istanbul, many brought by buses that stretched back kilometers along the Marmara Sea coastline where they parked.

The benchmark stock index fell 1.4 percent at the close in Istanbul, taking its loss this month to 8.3 percent. Yields on two-year lira bonds rose 3 basis points to 6.24 percent. The lira fell 0.4 percent against the dollar.

Cancellations of tourist bookings to Istanbul have reached 50 percent, endangering the government’s target this year of 32 million tourists and $25 billion in revenue, Hurriyet said today citing Timur Bayindir, head of the Turkish Hoteliers Association. In a survey of chief executives by Ekonomist magazine, almost 60 percent said business had suffered.

Merkel Criticism

At least four people have been killed during protests. The Turkish Medical Association said more than 11,000 people were exposed to tear gas in the week through June 15.

German Chancellor Angela Merkel, asked in an interview with RTL television today about the violence in the context of Turkey’s EU membership bid, said that “what’s happening in Turkey at the moment doesn’t conform to our understanding of freedom to gather and free speech.”

Erdogan says he wants to reconstruct Ottoman-era barracks near Gezi Park. An Istanbul court order on June 1 stopped construction of a sidewalk around the park. Erdogan said on June 14 that the plan will be put on hold until courts rule, and will then be submitted to a public vote.

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Zimbabwe wants "equitable" media treatment before elections

SAPA, SABC News, 17 June 2013

Zimbabwe's official electoral body says it will for the first time take disciplinary action against journalists for unfair reporting ahead of the nation's upcoming elections.

Electoral Commission head Judge Rita Makarau said on Monday that they will start monitoring media reports on the polls set for July 31.

Makarau said all political parties must be given "equitable" coverage in the independent media and the dominant state-run media controlled by loyalists of longtime President Robert Mugabe.

Equal media access was set as a condition of a power-sharing deal forged by regional leaders between Mugabe and former opposition leader Prime Minister Morgan Tsvangirai after violent and disputed elections in 2008.

But it has not been adhered to by Mugabe's state media and the sole national broadcaster.

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Turkey unrest goes on despite end to park protest

Elena Becatoros And Suzan Fraser, Business Day, 17 June 2013

ISTANBUL — Riot police cordoned off streets, set up roadblocks and fired tear gas and water cannon to prevent anti-government protesters from converging on Istanbul’s central Taksim Square on Sunday, unbowed even as Turkey’s prime minister addressed hundreds of thousands of supporters a few kilometres away.

The contrasting scenes pointed to an increasing polarisation in Turkish society — one which critics say Prime Minister Recep Tayyip Erdogan has fuelled with the fiery rhetoric he has maintained since they began more than two weeks ago.

A police crackdown on Saturday evening that ended an 18-day peaceful sit-in at Taksim Square’s Gezi Park sparked daylong unrest on the streets of Istanbul, while police also broke up demonstrations in the capital, Ankara, and the southern city of Adana.

The protests began in Gezi Park more than two weeks ago and spread to dozens of cities across the country. Mr Erdogan has blamed them on a nebulous plot to destabilise his government. Five people, including a policeman, have died and more than 5,000 have been injured, according to a Turkish rights group.

Elected to his third term just two years ago with 50% of the vote and having steered his country to healthy economic growth, the protests are unlikely to prove an immediate threat to Mr Erdogan’s government. But they have dented his international image and exposed growing divisions within Turkish society. Never before in his 10-year tenure has Mr Erdogan faced such an open or broad expression of discontent.

Critics have accused him of an increasingly autocratic way of governing and of trying to impose his conservative Muslim views on the lifestyles of the entire population in a country governed by secular laws — charges he vehemently denies.

"They say, ‘Mr prime minister, you are too harsh,’ and some (call me) ‘dictator’," he said during his speech in his second political rally in as many days. "What kind of a dictator meets with people who occupy Gezi Park as well as the sincere environmentalists?" he questioned, referring to a meeting on Thursday night with protest representatives.

Mr Erdogan defended his decision to send police in to end the occupation of the park, where protesters had set up a tent city complete with a library, food distribution centre, infirmary, children’s activity area and plant nursery. Water cannon and tear gas forced thousands to flee, and cleanup crews ripped down the tents and food overnight.

"I did my duty as prime minister," he told his supporters.

"Otherwise there would be no point in my being in office." About 10km away in the centre of the city, police fired tear gas, water cannon and rubber bullets to disperse thousands of protesters trying to converge on Taksim Square. In some neighbourhoods, protesters set up barricades across streets while youths threw stones at police.

In others, police broke up demonstrations with dense clouds of stinging tear gas that sent protesters fleeing into side streets.

Some took refuge in nearby cafes and restaurants, where waiters clutched napkins to their faces to ward off the gas.

Similar scenes developed in Ankara, where about 50 demonstrators were injured, including a 20-year-old woman who was in critical condition after being hit in the back of her head with a tear gas canister, according to Selcuk Atalay, secretary-general of the Ankara Medical Association.

In the southern city of Adana, police clashed with stone-throwing demonstrators, the state-run Anadolu Agency said. A fight broke also broke out between the demonstrators, with one group trying to prevent the other from throwing stones at police.

Anadolu said a total of 105 people were detained in Ankara, including a Russian and an Iranian.

Rights group Amnesty International said more than 100 people were believed to have been detained during Saturday’s demonstrations in Taksim and nearby districts, and said police were refusing to give details of their whereabouts.

Some among the thousands who fled Gezi Park during Saturday night’s police operation had still not managed to return home by Sunday afternoon, fearing being arrested by the police. Mr Erdogan has repeatedly labelled those who attended the park protests as troublemakers and illegal groups, although he has also said he understood the complaints of those who had truly environmental concerns at heart.

One young man who had been demonstrating for days in Taksim Square and Gezi Park, said that as he and his friends fled the police operation in Gezi Park, they ran into a group of men armed with iron bars who chased them through the streets. It was unclear who they were.

Kenan, who spoke on condition his full name not be used for fear of arrest or being targeted in reprisals, said the group took refuge in an apartment building, where they were still hiding late on Sunday afternoon.

Labour unions called for a one-day strike that would include doctors, lawyers, engineers and civil servants in support of the protesters. Strikes, however, often have little visible impact on daily life in Turkey.

In a potentially worrying development suggestive of a possible escalation in the violence, Mr Erdogan said two police officers had been injured by bullets fired during the overnight unrest.

"(One) was shot with a bullet in the stomach, the other was shot in the leg," he said.

On Sunday, TV footage showed police detaining white-jacketed medical personnel who had been helping treat injured protesters, leading them away with their hands cuffed behind their backs.

Istanbul Gov Huseyin Avni Mutlu denied they were medical staff.

"They wore doctors’ white coats but had nothing to do with medicine or health. In fact, one of them had seven separate criminal records for theft," he said on his Twitter account, contradicting earlier comments in which he had said several doctors had been detained.

Amnesty International noted that the health minister had previously stated that the improvised infirmaries set up by protesters to treat those injured in clashes or during police intervention were illegal and that doctors could face prosecution.

"It is completely unacceptable that doctors should be threatened with prosecution for providing medical attention for people in need," Andrew Gardner, Amnesty International’s researcher on Turkey, said in a statement. "The doctors must be released immediately and any threat to prosecute them removed."

Sapa-AP

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Catholics and Lutherans will jointly mark Reformation’s 500th anniversary in 2017

Tom Heneghan, Reuters, 17 June 2013

VATICAN CATHOLIC LUTHERAN WORLD FEDERATION GENEVA LUTHER REFORMATION 2017 ANNIVERSARY SPLIT CHRISTIANITY GERMANY

 

Senior Roman Catholic and Lutheran officials announced on Monday they would mark the 500th anniversary of the Reformation in 2017 as a shared event rather than highlight the clash that split Western Christianity.

The Vatican and the Lutheran World Federation (LWF) presented a report in Geneva admitting both were guilty of harming Christian unity in the past and describing a growing consensus between the two churches in recent decades.

The 500th anniversary of Martin Luther’s 95 Theses, the doctrinal challenge that launched the Protestant Reformation, will be the first centenary celebration in the age of ecumenism, globalization and the secularization of Western societies.

“The awareness is dawning on Lutherans and Catholics that the struggle of the 16th century is over,” the report said. “The reasons for mutually condemning each other’s faith have fallen by the wayside.”

They now agree belief in Jesus unites them despite lingering differences, it said, and inspires them to cooperate more closely to proclaim the Gospel in increasingly pluralistic societies.

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5.    Comment

COSATU E-toll Campaign goes ahead in 2013

 

For more information, contact COSATU Offices

                                

Come one…..Come All!

 

Stop Commodification of public goods!

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COSATU Section77 Notice served at Nedlac on the 11th December 2012

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Turkey’s economy is vulnerable

Reuters, Hugo Dixon, 17 June 2013

Tayyip Erdogan seems to like the concept of “choking” things. At the weekend, Turkey’s prime minister sent riot police into an Istanbul park with tear gas and water cannons to clear out the protestors. A week earlier, he had threatened to “choke” an alleged “high-interest-rate lobby” of speculators who wanted to push interest rates up and suffocate the economy.

Erdogan’s harsh actions against protestors and harsh words against investors could backfire economically. The country depends on foreign investors to fund its big current account deficit. If they turn tail in response to the mounting unrest, interest rates will indeed have to rise.

The protests which began two weeks ago over Tayyip Erdogan’s alleged authoritarianism, triggered by the prime minister’s insistence on bulldozing one of Istanbul’s few public parks, initially alarmed investors. The stock market plunged, the lira fell and government bond yields spiked. Then, after the central bank intervened in the foreign exchange market and Erdogan offered concessions last week, investors calmed down.

But the weekend’s use of riot police has stoked a conflict that seemed like it might be on the point of resolution.

The problem is not so much that speculators have an incentive to jack up interest rates. This would be perverse. Foreign investors own $140 billion of domestic bonds and equities, according to Standard Bank. They will lose money if interest rates rise.

The risk rather is that investors will pull out their money if they lose confidence. The U.S. Federal Reserve’s indication that it may slow down its massive bond-purchasing programme has exacerbated that risk, as some of the money it has been pumping into U.S. bonds has seeped into emerging markets such as Turkey.

What’s more, the Turkish miracle isn’t quite as good as it seems. The economy grew only 2.6 percent last year, down from 8.5 percent the previous year – after the central bank had to hike interest rates because the economy was overheating and inflation reached 8.9 percent last year.

Turkey’s biggest economic weakness is its current account deficit – a sign that consumption has been growing faster than is sustainable. The deficit did fall to 5.9 percent of GDP last year, after a 9.7 percent gap the previous year, as the economy slowed. But it is rising again this year. The April trade deficit was $10.3 billion, up from $6.6 billion last year.

Indeed, the selloff in Turkey’s financial markets began a week or so before the police crackdown on protestors in Istanbul’s Taksim Square on May 31. For example, two-year bond yields rose from 4.8 percent on May 17 to 6 percent at the end of the month; and the stock market fell 8 percent between May 22 and the end of the month.

Until now, international investors have been happy to fund the deficit. Not only were they attracted by the strong economic growth. They also liked Erdogan’s pro-market approach, the political stability they thought he had brought and the prospect that Turkey’s march towards a market democracy would be anchored by negotiations to join the European Union, says Timothy Ash, Standard Bank’s head of emerging markets research.

The “interest-rate lobby” also liked the fact that the government’s debt is only 35 percent of GDP and that banks have strong balance sheets, partly because they were seared by Turkey’s financial crisis at the start of the millennium. Meanwhile, both Moody’s and Fitch recently upgraded the country to investment grade.

The problem is that the unrest is casting doubt on some of these positive factors. For a start, Turkey no longer looks so stable politically. Then there’s the fact that Erdogan’s attack on speculators is sowing doubts about the depth of his commitment to markets. Furthermore, the crackdown on protestors may undermine Turkey’s chances of joining the EU after Germany last week suggested delaying the next round of negotiations. What’s more, the unrest could harm growth if tourists are deterred from visiting and domestic consumers become more cautious.

A particular weakness is that the current account deficit has been largely funded with hot money. The share accounted for by foreign direct investment – long-term money that can’t easily run away – has been falling, according to Morgan Stanley. Meanwhile, the share made up by debt has been on the rise.

One measure of Turkey’s vulnerability to a loss of confidence is that it has an “external financing requirement” of $205 billion – roughly a quarter of GDP – over the next year, according to Standard Bank. This financing requirement is the sum of its current account deficit and the maturing debt it needs to repay or roll over. A more extreme measure of vulnerability would add the $140 billion of foreign held bonds and shares. If this tries to flee, the lira could plunge.

Against this, the central bank has $130 billion of reserves, which it dipped into last week when it helped to stabilise the foreign exchange market. This war chest, though, is low compared to Turkey’s external financing needs. What’s more, the net reserves – after excluding foreign exchange deposited by the banking system – are only $46 billion, according to Standard Bank.

So the central bank couldn’t hold the line if the “interest-rate lobby” really did run for the exits. In that case, Turkey would have to raise interest rates, which would damage growth. And then the economic miracle, which Erdogan has presided over and which is one of the main sources of his popularity, might look like a conjuring trick. Instead of choking protestors, Turkey’s prime minister should try to make a genuine peace with them.

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Economic worries and the global elite

Reuters, Chrystia Freeland, 17 June 2013

 

Here’s one sign the global elite is starting to get worried that capitalism isn’t working for the Western middle class. At the TED Global gathering in Scotland’s elegant capital city this week, much of the spotlight was on what’s going wrong with the 21st-century economy.

That matters because the TED conferences are one of the obligatory stops on the itinerary of any self-regarding plutocrat, and in the past that constituency has often preferred its vision of the economic future served sunny-side up. (TED stands for technology, entertainment and design, and is a not-for-profit global conference organization.)

The gloom started with former Prime Minister George Papandreou of Greece. In a remarkably candid and introspective talk, Papandreou offered a mea culpa for his own mistakes and those of the European political elite. He admitted that hardship had been imposed on people who were “in the main, not to blame for the crisis” and accused the European establishment of uncritically, and at great cost, clinging to “the orthodoxy of austerity.”

Small Greece, he argued, had been made the scapegoat for a larger political and economic failure. As Papandreou mockingly put it, Europe chose to point the finger at “those profligate, idle, ouzo-swilling, Zorba-dancing Greeks.” Instead of addressing the harder, underlying issues, the impulse was to say: “They are the problem! Punish them!”

Papandreou is a son of privilege – both his father and grandfather were prime ministers of Greece – but, in a sign of the times, he inveighed against “plutocrats hiding their assets in tax havens” and “powerful lobbies protecting the powerful few.” His comments made an impact partly because he was so open in declaring his own shortcomings. Nor did he shy away from how angry a lot of people are about them.

“It’s no wonder many political leaders, and I don’t exclude myself, have lost the trust of our people,” Papandreou said, in the most affecting passage of his talk. “When riot police have to protect parliaments, a scene that is increasingly common around the world, there is something wrong with our democracies.”

For the chosen few inside the TED hall, Papandreou also inadvertently served as a physical reminder of how bitterly felt the rage is among some of the masses on the outside. Gray, rainy Scotland is a long way from Greece, but even here, Papandreou was greeted by protesters incensed at the pain his austerity measures imposed on his country. The city’s gracious, granite streets were plastered with posters calling on Papandreou to go home and attack austerity across Europe.

That was just a start. A session devoted to “Money” offered more critiques. Didier Sornette, a professor of risk at the Swiss Federal Institute of Technology, took the world’s financiers to task for being so bad at anticipating asset bubbles. Booms and busts, he asserted, are predictable and often controllable, and he offered his own technique for spotting them.

Next up for a flogging were the ratings agencies: Annette Heuser, executive director of the Washington branch of the Bertelsmann Foundation, based in Germany, denounced them as opaque, conflicted and dangerously powerful.

“The sector needs a complete overhaul, not just a trimming around the edges,” Heuser said. “We’ve left the major financial players alone for too long.”

The credit ratings of countries, she argued, need to be redefined from a profit-making business to a public good, and she outlined her effort to create an international not-for-profit organization that could challenge the oligopoly of the ratings agencies.

Most passionate of all was Mariana Mazzucato, a professor of economics at the University of Sussex, in England. Her gripe was with the familiar characterization of the private sector as the sole source of innovation and creative thinking and of the state sector as a Kafkaesque world of inefficiency, bureaucracy and frustration.

The reality, Mazzucato said, is that the state is responsible for some of the most essential, and initially risky, innovations in our world today, ranging from the Internet to “the cool, revolutionary things in your iPhone.” The state, she argued, is a “market maker,” whose ability to take bold, risky bets is critical for economies to grow at the global cutting edge.

Disclosure alert: I was a speaker, too. I talked about my chief obsession, soaring global income inequality, particularly at the very top of the pyramid, and the uncomfortable fact that the same forces that are enriching the global super-elite are hollowing out the middle class in the Western developed economies. Making capitalism work for everyone, and not just the plutocrats, I argued, is our most pressing political and economic problem.

Taken together, and given the gilded venue, all of these comments amount to a significant shift in tone. Charlie Robertson, the global chief economist for Renaissance Capital, the Russian-based investment bank, was moved to post on Twitter, in reaction to the TED lineup, that the “intellectual ascendancy of neo-liberalism since 70s may be in retreat.”

That is probably going too far. But we do seem to be at a turning point, or the beginning of one. Judging by this week in Edinburgh, even the winners in the global economy are beginning to realize that there are a lot of losers, too, and that that’s a problem. You might see that as too little too late; you might also see it as, at long last, a start.

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Norman Mampane (Communications Officer)

Congress of South African Trade Unions

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