Power failures in South Africa bring country to halt

NY Times:

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The predicament was foretold. In 1998, a government report warned that at the rate the economy was growing, the nation faced serious electricity shortages by 2007 unless capacity was expanded. The government, led by President Thabo Mbeki, who assumed office in June 1999, tried unsuccessfully to induce private investors to build additional power plants. Only belatedly did it permit Eskom to begin the necessary expansion.

“The president has accepted that this government got its timing wrong,” Alec Erwin, the public enterprises minister, said last Friday at a much-anticipated news briefing that broke a mystifying public silence.

This statement was a rare admission of fault by a prideful, post-apartheid government. Mr. Mbeki, now in the final year of his second term, can legitimately boast of many successes, among them the provision of electricity to the impoverished masses. Since the African National Congress came to power in 1994, South Africa has doubled the percentage of its population connected to the grid to more than 70 percent.

Though the government insists it will not allow the power crisis to jeopardize future industrial projects and interfere with plans to play host to the 2010 World Cup in soccer, many experts consider the power shortage a lamentable foul-up likely to undo some of Mr. Mbeki’s economic accomplishments.

“The warnings were well-known, but the government was too aloof and arrogant to act,” said William Mervin Gumede, the author of “Thabo Mbeki and the Battle for the Soul of the A.N.C.” (Zebra Press, 2005, with a revised edition in 2007). “This is simply disastrous for the economy. You can throw out all the goals of 6 percent economic growth.”

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One of the reasons the private sector was reluctant to invest in South Africa is the legitimate fear that the government would steal their investment. The government is already making Mugabe like noises about taking property from whites to give to blacks. This type of "transaction has robbed Zimbabwe of some of its most productive citizens and made everyone poorer, not just the ones whose property was taken. South Africa is going to have to demonstrate that it is open to everyone and will protect private property.

Comments

  1. Yes, the current energy crunch in SA is troubling, but not unique to that country. Bad decisions lie at the root of the problem. However, it does not follow from those decisions that property rights in SA are under threat. Ask Ford, which just announced that it was investing $200 million to expand production in SA, or Barclays, which recently paid $5.5 billion for a controlling share of the SA banking group ABSA, or the Industrial and Commercial bank of China which just paid even more for a 20 per cent stake in SA's Standard Bank. Take a look, too, at the boom in property prices SA has experienced in recent years. What aside assumptions based on stereotype makes people think that what has happened in Zimbabwe is going to happen in SA.

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