Last Friday at around noon, I ended a class on European settlement at the Cape and the demise of the Khoesan by lamenting the lack of public acknowledgement for some of the Cape’s most famous Khoe inhabitants. Autshumao was one of the first translators and interlopers between the trading Dutch and local Khoesan clans. Gonnema was a proud leader of the Cochoqua, who fought the Dutch in three Khoe-Dutch Wars. And then there was Krotoa, Autshumao’s niece, who was brought up by the Van Riebeecks. Here is her short Wikipedia bio:
On 3 May 1662 Krotoa was baptised by a visiting parson, minister Petrus Sibelius, in the church inside the Fort de Goede Hoop. The witnesses were Roelof de Man and Pieter van der Stael. On 26 April 1664 she married a Danish surgeon by the name of Peter Havgard, whom the Dutch called Pieter van Meerhof. She was thereafter known as Eva van Meerhof. She was the first Khoikoi to marry according to Christian customs. There was a little party in the house of Zacharias Wagenaer. In May 1665, they left the Cape and went to Robben Island, where van Meerhof was appointed superintendent. The family briefly returned to the mainland in 1666 after the birth of Krotoa’s third child, in order to baptize the baby. Van Meerhoff was murdered on Madagascar on 27 February 1668 on an expedition.
Krotoa returned to the mainland on 30 September 1668 with her children. Suffering from alcoholism, she left the Castle in the settlement to be with her family in the kraals. In February 1669 she was imprisoned at the Castle and then banished to Robben Island. She returned to the mainland on many occasions just to find herself once more banished to Robben Island. In May 1673 she was allowed to baptise a child on the mainland. Three of her children survived infancy. She died on 29 July 1674 in the Cape and was buried on 30 September 1674 in the church in the Fort,
Pieternella and Salamon, Krotoa’s two youngest children from her marriage to van Meerhof, were taken to Mauritius in 1677. Pieternella, who was known as Pieternella Meerhof or Pieternella van die Kaap, later married Daniel Zaaijman, a VOC vegetable farmer from Vlissingen. They had four sons and four daughters, one of whom was named Eva, and the family moved back to the Cape in 1706.
I ended my class by suggesting the students consider these local figures when they think about renaming campus buildings, as had happened last year during the #FeesMustFall movement. What I had not known, was that at that exact moment, Krotoa’s spirit was returned to the Castle of Good Hope where her remains had been removed from a century ago. Here’s the news report:
Gathered around a tree at the Groote Kerk, they [traditional and religious leaders] burned an incense plant and beckoned for her soul to rise from the unmarked grave where her bones had been held.
Her remains had been removed from the grounds of the Castle of Good Hope, nearly a century after she was buried there.
On Friday, some of her descendants returned with her spirit to the castle.
A few months ago, after uncovering an old computer file that contained my genealogy, I discovered that the wife of my paternal great-grandfather – Wynand Breytenbach Fourie – was one Johanna Beatrix Fourie. Her maiden name: Zaaiman.
Many other South Africans also descend from Krotoa. It is in the math – here’s Stephen Fry on the topic. Almost all white South Africans today must have some non-European heritage, given the women of Khoe or slave (especially) origin who married Dutch or German or French (or, in Krotoa’s case, Danish) men at an early stage in the country’s history.
Although several novels have appeared that feature her – most famously Dan Sleigh’s Eilande and Dalene Matthee’s Pieternella van die Kaap – Krotoa, and the tumultuous times she lived in, has been largely neglected from popular discourse. Fortunately, that is changing. In the ceremony on Friday, she was variously described as a child labourer, a feminist, and a language fighter who helped create Afrikaans, even a martyr. An Afrikaans/Nama movie that feature her life is now in post-production stage. Armand Aucamp plays Jan van Riebeeck and Crystal Donna Roberts an older Krotoa.
But more should certainly be done. Monuments and renamed buildings and public places can play a role, but because Krotoa’s story is claimed by so many (as Heritage Consulatant Tracy Randle explains in this interview), these memorials will remain contested. Some activitists protested outside the Castle on Friday, for example. Last year, a bench which had Krotoa’s face engraved in mosaic art, and which was located at Krotoa Place, the small square at the intersection of Castle Street and St George’s Mall, was destroyed.
Much like 350 years ago, Krotoa embodies the tragedy and disillusionment but also the hopes and aspirations of our fractured society. Unshackled to anyone or any group, hers is our story.
Or, as Lara Kirsten observes in her poem Vir Krotoa (For Krotoa):
in haar skyn die hoop
wat nog by ons mense spook
(in her shines the hope that still frightens our people)
One of the most profound (and often most difficult to teach) insights in economics is the idea that trade is not a zero-sum game. Just as my salary allow me to purchase all the things I cannot (or don’t want to) produce on my own, so do our exports (of the things we are good at) allow us to buy imports (of the things we are not good at). We do not work simply to accumulate a salary; we work because it allows us to buy nice things.
In other words, we are not mercantilists. A mercantilist hopes to export as much as possible and restrict imports. A large, positive trade balance, they believe, will ‘make a nation rich’. Not so. Mercantilism is not why England experienced an Industrial Revolution, and it is not why Africa will grow rich. Having more exports than imports over the long-run simply means that a country’s citizens are not reaping the fruits of their labour. To return to the earlier metaphor: it’s like earning a salary but not being allowed to purchase anything with it.
It’s easy to sell mercantilist ideas, though. Here is Mr Wilmot in the Legislative Council of the Cape Colony in August 1891: ‘Let us be wise in time, and really patriotic, grow our food, encourage our own industries…’. Or Mr Merriman in the same debate: ‘The best form of Protection was for everybody to set to and buy as much as they could in the Colony. (Hear, hear.)’ Or Mr Van den Heever: ‘The question was to keep, through fostering Colonial industries, the money in the Colony’.
You don’t need to go too far to find similar sentiments in contemporary debates. The clothing and textile industry recently held an Imbizo to discuss ways to grow the industry. Some of the comments on news websites reporting this story summarise the sentiment I often find in my classes too: ‘Chinese imports killed the textile industry in South Africa’, ‘You forget the greedy retailers preferring the cheapest suppliers’, ‘All we need is a 90% buy local campaign’, ‘With a bit of good will and assistance in the form of import restrictions we would all benefit. Jobs, better quality and some pride in the achievement would do all of us some good!’.
Again, not true. Aside from the small detail that the industry has received support since the 1930s, long before China was a competitive force, we should rather export what we are good at, and import the cheap goods which we aren’t relatively good at. (Also, Chinese clothes are becoming increasingly expensive as Chinese wages increase. We are increasingly importing clothes from other parts of Asia, and Africa.)
But how do we do this? Two recent UNU-Wider working papers by South Africa’s foremost trade economists help to answer exactly this question. The first, by a team of economists from North-West University and Stellenbosch University, use a new firm-level dataset of South African manufacturers to understand exporting firms better. They report five key findings: 1) Export participation is rare – only 19% of South African firms export. 2) Exporters are systematically different to non-exporting firms – they are larger, more labour productive, pay higher wages, and are more capital and intermediate-input intensive than non-exports. I will lump all these things together and just say they are ‘better’. 3) Firms that export to multiple destinations and across multiple product lines are ‘better’ across all the dimensions listed above. 4) Exporters to countries outside Africa are ‘better’ across the same dimensions than exporters to countries within Africa. 5) Firms that already export are most likely to grow the total value of exports than new entrants.
The second paper, by researchers at the University of Cape Town and the University of Bari in Italy, use similar data to show that the most productive South African firms are the ones that both import and export. Importing from advanced economies especially makes local firms more productive, and more likely to export at greater scale, scope and value. The authors argue that access for domestic firms to a variety of intermediate inputs from abroad can be crucial to raising local employment and gaining access to new technologies.
The takeaway: South Africa’s exporters need imports to be competitive. We can only grow our local exporting firms by giving them access to the cheapest inputs and the best technologies, and these are often found outside South Africa. Much like our 19th-century ancestors, our zest to expand exports will only inflict harm if we adhere to the mercantilist sentiment by restricting imports.
*An edited version of this first appeared in Finweek magazine of 14 July.
In Afrikaans, the same word is used for ‘vote’ and ‘voice’ – stem. Today South Africans vote in the local government elections. But it is more than that: it is a day that they will voice their hopes, frustrations, and visions for a better South Africa.
Because, 22 years into democracy, there is now more than ever a need to signal to the ruling alliance that they cannot take their tenure for granted. There is no doubt that those in power have become too emboldened by their own success; weak political competition has provided fertile ground for corruption and mismanagement. As always, the squandering of public funds has hurt the poorest the most.
Although this won’t be an election about macro policy, the failure of the ANC (since Zuma) to stimulate growth (and its incompetence to root out corruption) will deliver more votes for the two opposition parties, the DA and the EFF. The two central questions are: which opposition party will voters prefer, and how many will make the switch? The two parties are run by young men with very different visions of a future South Africa.
In this election, the question should be which of the two can provide the services that constituents deserve. But a careful consideration of this question, unfortunately, is probably not how most of us make decisions. This is not unique to South Africa, of course. As this John Oliver excerpt shows, feelings, nowadays, trump facts. Also: see Brexit.
Today’s municipal elections will be especially heavily contested in three metropolitan areas: Nelson Mandela Bay, Tshwane and Johannesburg. If an opposition party (or a coalition of opposition parties) secures a win in these major cities, especially in Tshwane and Johannesburg, it will signal a fundamental shift in politics in South Africa. But don’t underestimate the resolve of the ruling ANC: the liberation movement continue to be a powerful brand for most South Africans, despite the actions of the man in charge.
Today is stemdag in South Africa. It is a day to vote, yes, but, most importantly, it is a day to make our voices heard.
I got my first set of eyeglasses at the age of 16. I vividly remember sitting at the back of the physics class and squinting to read the formula on the board, and the embarrassment of having to move to the front. I also vividly remember the joy of facing my friend in the nets when, wearing new contact lenses, I could finally ‘read’ his spinners.
Invented in Italy in the 13th century, eyeglasses were initially used by scribes to allow them to remain productive long after their natural eyesight had deteriorated. But the technology improved over time, and has allowed me and many generations of young and old, male and female, doctors, soldiers, clerks, truck drivers, computer scientists and athletes with hyperopia (farsightedness) to remain productive members of society.
But many millions are not so lucky. The World Health Organization estimates that at least 20 million Africans are visually impaired, and hopes to reduce this figure by 25% by 2020. Many of these are children in schools, struggling to read the board or their prescribed books. This is an example, it seems, where developmental efforts should be focused: an inexpensive solution with long-term benefits for the recipients.
A new study published in the Journal of Development Economics attempts to measure the gains from just such a programme. Paul Glewwe, Albert Park and Meng Zhao report the results from a randomized control trial in Western China that offered free eyeglasses to rural primary school students. Almost 10% of primary school students in these areas have poor vision, but very few of them wear glasses. The authors find that wearing eyeglasses for one academic year increased the average test scores of students with poor vision by an amount equivalent to 0.3 to 0.5 years of additional education.
That is a massive economic return to a small investment, which should raise the question: Why don’t parents make this investment themselves? For poorer families, it seems that eyeglasses are still too expensive. But other factors matter too: parents often lack awareness of their children’s vision problems, and it seems like girls are more likely to refuse wearing glasses. Maybe it’s time to introduce more glasses-wearing female characters in children’s programmes. (Apart from 78-year old Carl in Up, I can think of few Pixar/Disney movies with a lead character with glasses.)
This type of research allows policy-makers to identify the low-hanging fruit of development. Whereas more textbooks, or higher teacher salaries, or even deworming programmes (all policies that have been tested in schools) can be expensive, free eyeglasses will, with a small initial investment, yield large returns for the (often marginalised) individual and society.
Initiatives to improve health can have many other benefits too. Randomized control trials have been done on the impact of everything from washing hands and better toilets, to home-visitation programmes for teenage mothers and promotion programmes aimed at reducing open defecation. (Eliminating open defecation in rural villages, it is found, can increase child height significantly.)
South African researchers are making progress in identifying the low-hanging fruit for local communities. Ronelle Burger and Laura Rossouw, two researchers at Stellenbosch University, are investigating the impact of the Thula Baba Box, a box filled with baby products, clothes, information brochures, basic medicines, toys and other items, and given to young mothers. If the results show a large, positive impact on maternal and child health, there is no reason why the Thula Baba Box cannot be provided, free of charge, to all mothers in the country. Not only is it morally just, but it is a clever investment strategy too.
Sometimes, though, the low-hanging fruit can be as basic as a cup of tea. A new study by Francisca Antman of the University of Colorado-Boulder investigates the custom of tea drinking in 18th century England. One of the unintended consequences of tea drinking, which happened even among the lower classes, was an increase in the consumption of boiled water. She finds that regions in England with lower initial water quality had larger declines in mortality after tea drinking became widespread. This ‘accidental improvement’ in public health, she argues, happened at the same time as people were moving into cities, thus providing a healthy pool of labour needed for industrialization.
The next time you sit down with a cup of tea and a good book (remember those glasses!), remember the profound effect those simple ‘technologies’ have had, and, with the help of researchers and government funding, are still likely to have in much of the developing world.
*An edited version of this first appeared in Finweek magazine of 30 June.
South Africa’s tourism industry has had a tough time of late. The optimism after the 2010 World Cup has given way to pessimism following the visa regulations saga that did nothing but hurt the local tourism industry. A rough calculation on recently released tourism numbers suggests that the additional rise in tourism numbers from the World Cup (on which South Africa spent billions) was completely nullified by the new visa regulations. Thankfully that blow has now been softened by changes to the regulations.
Tourism is vital to South Africa’s economy, often more so than other industries, for at least two reasons: It is labour-intensive, and this labour is often female and unskilled; for roughly every 9 tourists that visit South Africa, one job is created. More importantly, its impact is spatially dispersed. Whereas labour-intensive manufacturing is almost always concentrated in large metropolitan areas, tourists travel not only to Cape Town but also to Clarence, Clanwilliam, or Coffee Bay. In a research paper published in Local Economy, Gareth Butler and Christian Rogerson reports the results of interviews with black employees of tourism establishments in Dullstroom, a Mpumalanga retreat known for its fly-fishing and agribusiness. The authors find that most employees are recruited with little more than a high school certificate, but then gain valuable skills through on-the-job training (mostly improving their computer literacy) or, for some, more formal tertiary qualifications, including university degrees paid for by the employers. In short, the tourism sector provides opportunities in areas where there are few alternative income sources.
So what can be done to increase the numbers of tourists visiting South Africa? The most obvious answer is: make it as easy as possible for foreigners to temporarily enter our country. Enough has been written about the absurd visa regulations and their harmful effects. Let me just add this: in an attempt to prevent child trafficking, the regulations has hurt far more South African children by reducing the income (possibilities) of their mothers, women who would have found work in the tourism industry had more tourists been allowed to enter. TS Eliot’s ‘most of the evil in this world is done by people with good intentions’ comes to mind.
Making it easy for tourists also includes better and affordable transport to the country. More flights might require competitive airport landing slots. So, too, would efficient and safe border posts. And once they are here, allow them to use services that they trust, like Uber taxis and Airbnb accommodation (with the upshot of even more dispersed beneficiaries).
Advertising can help. Many countries try to boost their international image, for example, by hosting events. South Africa did this in 2010 with the FIFA World Cup and will do so again in 2022 with the Commonwealth Games. The tourism increases from the World Cup, as María Santana-Gallego and I show in a Journal of Sports Economics paper, was large and continued for a few years after the event. But a new paper in the Journal of Economic Perspectives by two gurus of sports economics, Robert Baade and Victor Matheson, warns against hosting mega-events. They find that ‘in most cases the Olympics are a money-losing proposition for host cities; they result in positive net benefits only under very specific and unusual circumstances’. Moreover, ‘the cost-benefit proposition is worse for cities in developing countries than for those in the industrialized world’. Ouch. Those who dream of a Durban or Johannesburg or Cape Town Olympics better take note.
Industry support, as with other economic sectors, seems to be of little help; often, the best governments can do for exports (tourism is formally: travel service exports) is to ensure a safe and open business environment. One of the first reactions to the Paris attacks in November last year, for example, was the fear that terrorism will harm France’s massive tourism industry. Paris was the world’s third most visited city in 2015. France remains, by a large margin, the world’s most visited country. Travel and tourism services contribute 9.1% to its GDP (South Africa is slightly higher at 9.4%, but significantly below New Zealand, for example, at 17.4%).
The fear seems justified: of course tourists would prefer to travel to places where they are less likely to be killed, or mugged, or even required to pay a bribe. And in a recent working paper, I (with María Santana-Gallego and Jaume Roselló-Nadal) find exactly that: a 1% increase in the ratio of terrorist attacks per 10 000 inhabitants reduce tourist arrivals by 2.3 %. We also measure the link between crime, corruption and tourism. We find that the effects of terrorism and crime are greater for leisure tourism than for business tourism but that corruption affects only business tourism.
Safety and security remains a central concern when traveling to South Africa. And even though the statistics show that tourists are safe, the perception of safety is what matters most. (Consider the actual versus perceived threat of Ebola. Trevor Noah did his best to dispel those misconceptions.) But the good news is that we also find that tourists from more unstable countries are more tolerant of terrorism, crime and corruption in the destination country. The rapidly expanding middle classes of China and especially India (cricket!) offer excellent opportunities for the South African tourism industry; on aggregate, the perception of crime and corruption, the statistics show, will have less of an effect on their decision to travel.
South Africa has many wonders to delight leisure and business tourists. Let’s welcome them with open borders and convenient regulations. And if you’re in the tourism industry, perhaps it’s good to shift focus to new markets where perceptions of safety and security are less likely to play a deciding role.
*An edited version of this first appeared in Finweek magazine of 16 June.
South Africa’s economy is in trouble. In June, StatsSA announced that the South Africa’s gross domestic product had fallen 1.2% in the first quarter of 2016. We are on the verge of a recession, hanging on by our fingernails. Weak and weakening capacity within national government to enact the necessary economic reforms stipulated in its own policy programme (the excellent National Development Plan) is largely to blame. And it is becoming increasingly apparent that the weakening capacity is the result of appointments based more on political affiliation than competency.
Global events have contributed to the malaise. The self-inflicted Brexit wound will hurt for a long time, and may even leave a permanent scar. Austerity measures implemented in the post-Great Recession era may have reduced government debt somewhat but had the political consequences of the rise of nationalists and fascists. As an older generation of political economists would have known but many modern-day macroeconomists may have ignored in their models, economics doesn’t happen in a political vacuum. England may have been first, but right-wing groups across Europe will only be encouraged by the UK’s ‘independence’. It wasn’t only austerity, though. Demographics played its part. Again, much was said about the economics of an ageing population, but few predicted that it would have political consequences too. Old people voted for Brexit; young people, who will suffer its consequences for longer, wanted to Remain.
It is in this context that I recently wrote a short paper on the economic history of South Africa since apartheid, and the road ahead. The paper is now available as a working paper. I divide the post-apartheid in two: the first 14 years of Nelson Mandela and Thabo Mbeki, and the next eight following the Great Recession and Jacob Zuma. While there is much to commend about the first period when the country reached GDP growth rates above 5%, the sad reality is that the last 8 have been dismal. A bloating state salary burden, ideological conflict within the ANC, and state capture have pulled the South African economy – and the poor’s prospects to enjoy social mobility – down.
I then outline a tentative plan for what to do next. The utopian dreams of the NDP are now worth little more than the paper they are written on. What is needed is a list of priorities of ‘low-hanging fruit’, policies that are affordable, politically acceptable and would support those most in need. I outline five such policies, beginning with family planning, early childhood development, education (schools and universities), and affordable and widespread broadband. Much more is needed, of course, to take us back to the optimism of the mid-2000s. But even with just a start in the right direction, I argue, we can benefit from the opportunities that a rising Africa and technological innovation have to offer.
Much has been said about the economic future of sub-Saharan Africa. One camp is largely optimistic, claiming that the relatively high economic growth rates of the last decade (even during and after a global financial crisis) is evidence of ‘Africa rising’, a continent slowly emerging from three decades of slumber. Another camp is less optimistic, claiming that this growth was limited to natural resource industries benefiting from rapid Chinese growth. (To put Chinese growth in perspective: even though China grew at ‘only’ 6.9% in 2015, it added $714 billion to its GDP. In contrast, South Africa’s GDP in 2014 was $350 billion. In other words, China added more than two South Africas to the global economy in 2015 alone.)
Both camps, of course, have elements of the truth. Many African countries, some of them very poor, have seen high economic growth rates over the past few years, growth that was and remain essential in lifting many thousands of people out of poverty. But it is also true that much of this growth has been limited to resource sectors that do not have the same spill-overs into other parts of the economy that manufacturing, for example, has. This raises doubts about its sustainability.
In April, the United Nations Economic Commission for Africa published a new report that clearly sides with the more cautious view. African countries are stuck in low-productivity, primary sector exports; the fall in the price of commodities, like oil in the past 18 months, has swelled budget deficits in places like Sudan, Nigeria and Angola. It is likely to have political consequences too.
To combat such vulnerability, the authors advocate ‘smart’ industrial policies to ‘upgrade’ the commodity sectors and promote the ‘development of higher-productivity sectors, especially manufacturing but also some high-end services’. They acknowledge that there are two trends working against such industrial policy action. First, a shrinkage of the ‘policy space’ due to the establishment of the WTO and the proliferation of bilateral and regional trade agreements. Simply put, countries have less scope for raising tariffs or other creative industrial measures than before. Second, the strengthening of global value chains makes ‘nationalistic’ industrial policy less effective. But this does not deter them: ‘There are still many industrial policy measures that can be used. Moreover, if anything, these changes have made it even more necessary for developing country industrial policy-makers to be ‘smart’ about devising development strategy and designing industrial policy measures.’
So what are these so-called ‘smart’ industrial policies? Unfortunately, after spending 156 pages explaining the need for ‘smart’ policies, the authors give us only one page of very vague principles: policy-makers ‘need to identify the ‘right’ policies’; policy-makers ‘need to induce foreign firms to create linkages with the domestic economy’; and policy-makers ‘should pay attention to the possibility of upgrading not just through the development of capabilities to physically produce goods but also through the development of producer services, such as design, marketing, and branding’. So much for practical guidelines!
The authors have missed a golden opportunity to actually think more creatively about Africa’s economic future. Technology is changing Africa’s comparative advantage. Global manufacturing will become increasingly capital intensive as robotics and technologies like 3D-printing (not mentioned once in the report) advance. What we consider low-skilled labour-intensive manufacturing (shoe-making, for example) may, overnight, become high-skilled, capital-intensive (once shoes can be printed), with production switching from countries like Vietnam and Bangladesh back to the developed world. Cheap labour will become less of an advantage as robotics becomes more affordable.
An additional factor that makes manufacturing in Africa so expensive is trade costs. We have few large cities on the coasts with easily accessible port facilities. How can landlocked Zambia compete with similar-sized Cambodia? Zambia has a railroad that goes through two other countries before it reaches the eastern coast of Africa; Cambodia’s capital has a river port that can receive 8000-ton ships. And statistics confirm this: the World Bank calculates that the cost to import a 20-foot container to Cambodia is $930. It is $7060 in Zambia. It is difficult to see how any ‘smart’ industrial policy can mitigate these massive cost differences.
Does this mean Africa is doomed to remain a primary good exporter? Not necessarily. Mobile technology is revolutionising the way Africans do business. It is a technology that negates Africa’s rugged terrain, leapfrogging the need for expensive fixed-line infrastructure. If it can receive the necessary investment, broadband and wireless technologies will do the same. This will allow Africans to provide services to a world that would have been impossible to reach only a decade earlier.
Can services alone propel Africa into the industrialised world? Apart from a few small economies – Singapore and Luxembourg – there is little past evidence that it can. A pessimist may thus proclaim little hope for the continent; an optimist may instead remember that technological innovation has a way to revolutionise existing industries. It is already happening: consider the much higher returns of Ugandan farmers after mobile technology allowed them access to real-time market prices for their goods. Or how Airbnb has empowered middle-income South Africans with a spare room to benefit from the country’s thriving tourism industry. Or how renewable technologies – also completely neglected in the UN report – will affect African countries’ power generation and distribution capabilities, supplanting the need for coal and other minerals.
What is clear is that the image of factories with thousands of low-skilled labourers working 8 to 5 jobs belongs to a previous century. To imagine that industrial policy can somehow transplant that image to Africa in the twenty-first century is fictional. The smartest industrial policy we can hope for is instead a belief that Africans have the agency to shape their own destiny, as long as they have access to the hard (fast and affordable internet and reliable electricity) and soft (IT colleges and programming degrees) infrastructure that will allow them to benefit from the technologies of the future.
*An edited version of this first appeared in Finweek magazine of 2 June.