President Jacob Zuma said little of note about the technology and telecommunications sectors in his inaugural State of the Nation address on Wednesday, as a recent ITWeb article by Paul Vecchiatto notes.
We should thank heaven for small mercies.
The sectors he did mention are already dominated by the state, or soon will be. Public works feature highly on the new president's economic agenda, and was the only item worthy of an actual price tag: R787 billion. As if it isn't enough that while manufacturing was responsible for most of the recent decline in GDP, government services represented the biggest growth.
According to Zuma, tight economic times may be cause for the public to tighten its collective belt, but government isn't bound by such simplistic notions as basic economics. No, for government, hard times are times to spend faster. To be precise: “The downturn should not cause us to change these plans. Instead, it should urge us to implement these with speed and determination.”
To be fair to the president, this thinking seems to be in vogue even in the countries that gave the world Reagan and Thatcher. Barack Obama has hardly sat down, and he already owns the American car industry and half its banking sector. There was a time, not so long ago, when the Bush deficits were a national crisis. Now they're heading many times higher, and for much the same reasons Zuma expressed.
Zuma's speech offered many clues to the government's economic thinking. These include using taxes to fund companies that taxpayers choose not to fund by actually buying their products and services. They include requiring companies to continue employing staff they can no longer afford, while they spend even more money retraining them. They include extending support for industries such as automotive manufacturing, which creates jobs for the lucky few, but makes cars more expensive for the masses. They include propping up the walking corpse that is the local textiles industry, which employs a few thousand workers, but despite all the protectionism still cannot beat China, Vietnam or the Philippines at producing a decent t-shirt with ANC, Cosatu or SACP slogans for the rest of us.
If the lack of focus on technology and telecommunications means the sector really will get less attention from government, it will be better off for it.
Ivo Vegter, ITWeb contributor
“We will also ensure that government buys more goods and services locally, without undermining our global competitiveness or pushing up costs beyond acceptable levels,” he said. What level of increased cost is acceptable he leaves unspecified, and how paying higher prices to support uncompetitive goods maintains our global competitiveness is also left as an exercise for those who weren't paying attention.
By these standards, the only “help” the ICT sector might expect is more Sentechs or Telkoms, supported or even owned by the taxpayer, propped up by subsidies, and kept alive by government business that chooses them not because they're cheaper or better than alternatives, but merely because they need the help.
There's no such thing as a free lunch, except in the idealistic world of socialists. By the time the richest taxpayers have left, and the rest are bled dry, we'll at least have great big wards of the state to offer us stuff at prices nobody can afford, and to keep would-be competitors who might offer more bang for the buck out of the market.
If the lack of focus on technology and telecommunications means the sector really will get less attention from government, it will be better off for it.
Rather government ignores it than push efficient providers out of the market with taxpayer-funded competition. Rather government ignores it than pre-empt innovation by deciding in its own (lack of) wisdom what customers need. Rather government ignores it than protect those who charge high prices by promising them government business. Rather government ignores it than impose additional costs that raise prices for everyone, for the sake of political goals.
The historic record of government involvement in the sector is painfully clear: little choice, low quality and high prices. Communication remains a luxury for the rich, thanks to the government's attempts to extend universal service to the poor.
That Jacob Zuma didn't consider ICT worth more than a passing mention may prove to be a blessing in disguise.
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