Trevor+in+Wonderland,+Barry+Sergeant,+Fear+and+Loathing,+Moneyweb

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=Trevor in Wonderland=


 * Barry Sergeant, Fear and Loathing, Moneyweb, 22 February 2008**

//Finance minister Trevor Manuel, the biggest nut in the South African public finance machine, went over the hump in his 12th national budget//

Finance minister Trevor Manuel has been the biggest nut in the machine known as the National Treasury for 12 years, giving him licence in this year's national budget to go right over the hump and crawl down to the brink of the flat world that this damned country has become. In return for his efforts accolades have been hurled at Manuel since he delivered his charming flotsam and jetsam speech on Wednesday.

Not once did he mention the new mining royalties that are to start sucking yet more filthy lucre from the mining sector from 1 May next year. Leave this new form of legalised confiscation aside for a moment and consider that a senior mining executive recently presented to the national executive council of the ANC the gory details of the horrifying job losses that lie ahead this year amid record commodity and metals prices.

If Eskom power supply to the country's mines is rationed to 90% for the year, the estimated job losses on the mines, and indirect job losses in services and goods businesses supporting the mines, runs to around 200,000 people. With a fair multiple of about five times, it means that a million people are going to get jabbed in the ribs and then kicked in the head. The new mining royalty, based on the old profit-to-revenue formula, is going to rip further into flesh when it erupts into evil life next year.

Analysts who have done research on how these royalties work reckon that gold mines would suffer a 20% shrinkage of bottom line profits, with platinum mines a little better off at only 15%. There is no joking about the mining sector:


 * 18% of GDP (gross domestic product), directly and indirectly
 * 50% of exports including beneficiated minerals
 * 460,000 direct employees and ± 400,000 employed by suppliers of goods and services
 * 50% of Transnet's rail and port services
 * 93% of power generation from coal
 * 37% of liquid fuels via Sasol's fuels-from-coal technology.

This is the same Trevor Manuel who suppressed an International Monetary Fund Article IV country assessment report for nine months, before being forced by opposition politicians to release it back in mid-2004. Where Manuel had earlier referred to the report as "a very positive review of the South African economy and economic policies", when fully naked the document was found to contain hard-hitting statements on policy failures. Random examples included South Africa's bizarre and heartless approach to HIV/Aids, failure to reform rigid labour markets, failure to create jobs and confront high rates of unemployment, and failure to turn the tide on crime.

That was four years ago. Well… check out the inside back cover of a recent edition of [|The Economist], where all kinds of interesting data are presented for 42 selected countries, excluding tin pot holes like North Korea, Zimbabwe and Cuba. South Africa carries one of the highest current account deficits in the world (second only to Spain) relative to the size of its economy; one of the highest rates of inflation, and some of the highest interest rates. In unemployment, the country is a staggering winner: a 25.5% rate, more than double the next-highest number.

This is the same Trevor Manuel who in 2002 found himself in a world freaked out by the bankruptcy of Enron in Texas. This was a world eager to hunt out corporate cannibals and savages. In his 2002 Budget speech Manuel gleefully sprung a stinging attack on the private sector, with the sleazy comfort of the overlord status he holds in a simply perfect public sector.

South Africa's 34 national public entities that are each year voted their own budgets by Parliament scored outstanding outcomes in the Auditor-General findings for 2006/07:


 * only three entities received "clean" reports
 * 19 entities were qualified by the A-G as to "other matters" and/or "matters of emphasis"
 * 11 entities were damned by qualified audit opinions, and
 * one entity was given a vomit-level "disclaimer" of opinion.

An overview of the 203 annual audits on national government departments performed by the A-G since 2001/02 gives just 12 audits (6%) with "clean" opinions. With his jaws sunk into the private sector in 2002, Manuel told Parliament: "The Enron debacle has brought into sharp relief a number of key issues - weak or non-existent governance structures, the fiduciary responsibility of directors, negligent and sometimes reckless management, ineffective auditing, independence of auditors and conflicts of interest arising from inadequate separation between auditing and consultancy".

This is the same Trevor Manuel who found himself surrounded by a group of classy and heavily enthusiastic advisors back in 1995, asking him to sign off documentation for new Eskom power stations. Everything was ready, to the last dot. With his demented cabinet cronies in the background, it took Manuel 12 years before he signed on the dotted line. For more than a month, the country has been on full electricity alert, and told to stay that way for at least the next five years. Down the rabbit hole, Alice has been asking "Who stole the tarts?"


 * From: http://www.moneyweb.co.za/mw/view/mw/en/page84?oid=195085&sn=Detail**

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