18 Friday, November 21 2014 BUSINESS REPORT

Opinion&Analysis

THERE are sound and compellinghistorical and cultural reasonsthat justify the formation of anEconomic Union composed of thecurrent southern African states.

The people comprising these southernAfrican states are historically andculturally one people. They can be said tobe members of one historical family, whichwas artificially split by the Europeancolonialists.

A few examples: the people calledBaTswana stretch all the way from whattoday is called Botswana to Pretoria – butthe European colonialists drew an arbi-trary line separating the BaTswana ofBotswana from the BaTswana of SouthAfrica; the people called the Swazi stretchfrom Swaziland to Mpumalanga andJohannesburg – but European colonialistsdrew an arbitrary line separating theSwazi of Swaziland from the Swazi ofSouth Africa.

The people called BaSotho stretch fromthe Lesotho to the Free State – but Euro-pean colonialists drew an arbitrary lineseparating the BaSotho of Lesotho fromthe Basotho of South Africa.

The same applies to the formation of acountry called Mozambique, as well as tothe drawing of the boundaries separatingpresent-day Zimbabwe from South Africa.

It is important to stress that there wasconstant movement of people from onearea of Africa to another. Today we moveas individuals, or as individual families; inthe pre-capitalist, pre-colonial era, wemoved as communities.

We know, for example, of the move-ments of communities of people from

KwaZulu-Natal, which spread to differentregions of southern Africa: we know ofcommunities led by Soshangane, whoestablished a kingdom in what today isMozambique; of communities led by Mzi-likazi, who settled consecutively in what isnow Gauteng, the North West and laterZimbabwe.

We know of communities led by Zwan-gendaba, who moved up to what now isMalawi and parts of Zambia and Tanzania;we know of Shemane, King Zwide’s son,who moved with his community to whattoday is Limpopo. In sum, these communi-ties were mixtures of Nguni, Sotho, Shona,Tswana, Venda, Pedi, and other cultures.

All these people were one family.Language is, among other things, a verysignificant piece of evidence in commu-nity genealogy.

The study of languages spoken by peo-ple in southern Africa shows that thesepeople are originally one family. For exam-ple, linguists who have studied the struc-ture of Nguni and Sotho languages haveconcluded that the Nguni language is theskeleton of Sotho languages; throughseparation of groups, migrations andinterface with differing environments andactivities, different flesh and accentsemerged: “If genetic relationship among anumber of languages can be demon-strated, it constitutes prima facie evidencethat the ancestors of the speakers of thoselanguages shared a common location atsome time in the past.” (Reconstructing

African Culture History, edited by C. Gabeland NR Bennett, 1967, p 31).

Capitalism, the African slave trade,colonialism and racism were like an enor-mous worldwide landslide that radicallyreshaped social relations, the human mindand consciousness throughout the world: anew measuring rod of human beingsemerged, which placed Europeans as thetop and best, and Africans as the bottomand worst, with the rest of humankindfalling in-between.

During the first two decades of the 20thcentury, Europeans began to carve andcreate new white-ruled nations in south-ern Africa: it was during the same periodthat Pan-Africanism was born, that theBambatha War occurred, and the ANC wasformed.

The ANC was originally formed as aPan-Africanist Movement for theemancipation of all Africans from Euro-pean domination. The first constitution ofthe ANC, adopted in 1918, takes it forgranted that the people of what today isBotswana, Lesotho and Swaziland, are con-stituencies of the new organisation. In herhistory of the ANC, Mary Benson wrote asfollows: “Early in January 1912, from thekraals in the Highveld and Lowveld of theTransvaal, from Zulu villages, from thebeautiful bare uplands of the Transkei,from the arid expanses of Bechuanalandand the royal capital of Swaziland, fromthe paramount chief ’s fastness in the

mountains of Basutoland, came chiefs andtheir followers… Among them were thechiefs from the neighbouring high com-mission territories: Prince Malunga Ka-Mbandeni, regent of Swaziland, just backfrom England; Chief Maama, the descen-dant of Moshoeshoe the Great, represent-ing the paramount chief of Basutoland;and chiefs Molema, Montsioa andMankwane from Bechuanaland.” (Benson,Mary, The African Patriots: The Story of the

African National Congress of South Africa,pp. 26-27)

The founders of this organisation werevery clear that they were forming a “Pan-African association”. Mary Benson contin-ues: “The conference resolved to unitetogether and form a federation of one Pan-African association” (p 28).

It must be emphasised that this Pan-African association would form a unionwith a single parliament, of which what to-day are Lesotho, Botswana and Swazilandwould be constituent parts. Ms Bensonfurther wrote: “The conference acceptedSeme’s recommendation that the Congressshould be modelled on the American Con-gress and it was also decided to combineBritish parliamentary structure and proce-dures in an Upper House of Chiefs and aLower House of Commoners, each with apresident. The paramount chief of the Ba-suto, Letsie ll, was unanimously electedhonorary governor, leader of the UpperHouse in which princes of African bloodwere to hold their seats for life” (p 28).

This was, indeed, a Pan-African agenda:Dr Seme travelled the entire southernAfrica, mobilising support for the ANC;that is the reason Nkosi Sikelel’ iAfrikabecame the anthem for the entire region.The kings and queens of Africa were thegod-parents of the ANC. Perhaps no peoplein southern Africa made a greater contri-bution to the establishment of the ANC,during the early years, than the Swazi.

Through Prince Sobhuza’s grand-mother, Queen Labotsibeni, the Swaziroyal kingdom made a tremendous finan-cial contribution for the upkeep of theANC; Dr Seme and Patrick Vilakazi relo-cated to Swaziland, as advisers to the royalleadership, and acted also as tutors to theyoung prince, so that he could be raised inthe tradition of the ANC.

As the new white nation-state calledSouth Africa became stabilised, consoli-dated and triumphant, the agenda of theANC was formulated anew in reaction tothe policies of the white nation-state: therebegan the south africanisation of the ANC.

European capitalism in southern Africadid not clip its wings to fit within the whitenation-state. Cecil Rhodes and Anglo-American used semi-slave labour ofAfricans from southern Africa to lay thefoundation of South African industrialisa-tion. It was the forced labour power of en-tire southern Africa which created themelting pot called South Africa. The min-ing industry knit the entire southernAfrica into one economy, with its metropo-lis being the white-controlled cities andtowns of the new country – South Africa.

I am emphatically not proposing thatLesotho, Botswana, Swaziland, Mozam-bique and the other existing states shouldbe made part of the existing South Africa;I am proposing that we form a new unionaltogether, comprising all the existingnations of southern Africa, beginning firstwith a Central Economic Council, whichshall make investment and planning deci-sions for entire southern Africa, whichlater on can result in political unification.

With the wealth of all southern Africa put together, this union shall bemore powerful and decisive in the worldeconomy than Brics (Brazil, Russia, India,China, South Africa) – and it shall impartgreat power to the participation of SouthAfrica in Brics.

Professor Herbert Vilakazi is an independentscholar and contributed this article in his personalcapacity. Note: This is the final article in a two-partseries on this topic. Reference works used in thispiece have been acknowledged by the editor.

BRAZILIAN President DilmaRousseff ’s administration mustcontend with a rapidly increasingbudget gap. The Brazilian govern-ment may well run into real

limits to its spending in the next couple of years.

Rousseff must focus efforts on eliminat-ing obstacles that interfere with privateinvestment. In order to win sustainableeconomic development and growth, sheneeds to find her global voice.

Share on Facebook, Twitter, Reddit,Linked-in and e-mail during late Octoberindicated a slim majority of Brazilianschose to re-elect Rousseff, but it is not clearBrazil has decided how to move forward.

Most Brazilians are frustrated with thecountry’s sluggish economic growth dur-ing Rousseff ’s first term. Many of her ownsupporters want the state to take moreaggressive measures to reboot theeconomy during her second term.

Others, including supporters of herchallenger Aécio Neves of the BrazilianSocial Democratic Party, want to shrinkthe size of the state and further liberalisetrade and investment policies in order todrive growth through expanding exportmarkets and increases in foreign directinvestment.

That at least is the path chosen half aworld away by India’s new leader, Naren-dra Modi. Brazil cannot afford to do anyless than India. Still, it is not clear that ei-ther policy model can overcome the head-winds Brazil faces from the global eco-nomic downturn. But try the country

must, in particular with regard to invitinggreater productive investment.

Managing the deteriorating conditionsof the external sector would challenge anygovernment. What makes this all theharder for Rousseff ’s administration isthat it must also contend with a rapidly in-creasing budget gap. It is larger now thanat any time since the Workers Party tookcontrol of the federal government in 2003.

Rousseff and her policy team must pre-pare to brace against the perfect storm thatcould submerge her second term in eco-nomic failure. The consequences of thatwould be monumental: Most important, itwould undermine the very social policiesthat have eliminated hunger and movedmillions of Brazilians away from extremepoverty and bury Brasilia in turmoil.

In an effort to preserve the country’ssocial policies, Brazil’s governing coalitionis unlikely to tack toward the deep fiscalconsolidation advocated by the Interna-tional Monetary Fund.

But government expenditures will needto be recalibrated so as to maximise imme-diate growth and create the conditions forcontinued public investments in educationand infrastructure, as well as the “interna-tionalisation” of Brazilian private firms.

Even so, the government may well runinto real limits to its spending in the nextcouple of years. This makes private invest-ment all the more important.

To weather the storm and neutralisespeculative investment, the governmentthis time around will hesitate to re-estab-lish capital controls. It is more likely thatRousseff ’s government, in co-ordinationwith the government banks, especiallyBrazilian Development Bank (BNDES),will intensify consultations with financial

and industry leaders to increase invest-ments and productivity. Brazilian industrymust focus investments on greater work-force development and training, produc-tive innovations and moving the industrialsector toward participation in higher val-ued-added global production chains.

These outcomes are possible during thelast half of Rousseff ’s second term, butthey can only be achieved through dia-logue, negotiation and joint planning. The

players involved are her economic policyteam, the bank BNDES, as well as privatesector leaders committed to increasingprivate sector industrial investment.

Rousseff ’s goal for her second termmust be to reboot the economy and drivesustainable growth with a fiscally prudentmix of public investments, greaterregulatory flexibility and private sectorincentives. To achieve that, she must focusefforts on eliminating those obstacles that

interfere with private investment as wellas the transfer of technology.

This means that she must make Brazil’sopaque taxation and customs systemsmore transparent and efficient. Properlyunderstood, measures such as this are notpro-capitalism and/or anti-poverty. Theyare key to strengthening Brazil’s economy.

Thus, Rousseff ’s second term adminis-tration must drive through reforms thatlessen the costs of doing business with aneye on the export prize.

Brazil’s recovery also depends uponthe global economy. The president shouldfocus the world’s attention on the pressingneed to expand and deepen global demandfor Brazilian commodities and industrialgoods. Now that the skilled Brazilian diplo-mat Roberto Azevedo has taken over thereigns of the WTO, Rousseff must harnessBrazil’s global political stature to refocusboth the developed world and leadingemerging economies on the benefits ofmultilateral trade liberalisation.

Rousseff needs to find her global voice.She will need to sing the praises of deeperglobal integration that aligns investmentwith comparative advantages. Her Work-ers Party’s government programme doesnot clearly propose greater global leader-ship for the Brazilian president or moreglobal integration for its economy.

To succeed, Rousseff will need torewrite the existing script. She has to ad-vance a foreign policy that advances thecountry’s economic and political interestswith a dual focus – Brazil contributingmore to the global economy and increasingthe returns from it to Brazilians.

Now, she must find ways of globalisingpolicies so that Brazil can harness all of itscomparative advantages.

Mark Langevin is director of BrazilWorks,associate researcher at the Centro Universitrio deBrasília, and adjunct associate professor ofgovernment and politics at the University ofMaryland-University College. This article initiallyappeared on The Globalist. Follow The Globaliston Twitter: @Globalist

REGULATORS around the worldare making good progress to-wards preventing future bankcrises from hurting the globaleconomy. Some of the new rules

proposed for individual bankers, how-ever, have more to do with revenge thansafety.

Unless the aim is to make life so diffi-cult for the world of finance that thebanks are forced to shrink – and, granted,that may be a desirable outcome – the pro-posals risk doing more harm than good.

The urge to continue bashing bankersis understandable, if inappropriate. Lastweek’s confirmation that foreign ex-change traders conspired to rig curren-cies even as their banks were being finedfor manipulating Libor (London inter-bank offered rate) is clear evidence the fi-nance industry hasn’t learnt enoughfrom the credit crisis. Vengeance, though,won’t help.

This week, the parliamentary commis-sion on banking standards, which hasbeen at the forefront of the UK’s refur-bishment efforts, issued a progress reporton its June 2013 recommendations.

One of its conclusions makes sense:Bonus payments should automaticallyend for the executives of any bank thatneeds a taxpayer bailout. All the work be-ing done to make sure banks maintain ad-equate capital to avoid that outcomemakes this bonus rule especially impor-tant. But the report also says that regula-tions need to be changed to capture boththe individuals who submitted falsemoney-market rates in the Libor scandaland the traders who schemed to distortcurrency values.

According to committee chairmanAndrew Tyrie, regulation needs to focuson those who can do serious harm to afirm, its customers or markets.

The appalling misconduct in the for-eign exchange market revealed last weekillustrates the importance of this.Traders involved in that misconductmust be included in the new certificationregime.

This regime puts the onus on banks toidentify the people responsible for eachrisk-taking function. But it won’t work totry to extend accountability all the waydown the food chain.

To see why it won’t, consider how in1995, Nick Leeson bankrupted the vener-able British institution Barings after los-ing more than $1 billion (R11bn).

Leeson’s trades were supposed toinvolve minimal risk, exploiting theteeny tiny price differences among equityfutures contracts traded on differentexchanges in Asia from his Singaporeoffice.

Even the most ardent regulator wouldhave been hard-pressed to classify Leesonas posing a systemic threat to Baringsprior to his blow-up.

While it seems fair that any and allbank employees should be subject to rulesdesigned to claw back bonus paymentsthat turn out to have been unjustified, it’sstill impossible to know in advance whichnew pocket of financial engineering mightturn out to cause trouble.

Tying the hands of individual traders,before it’s clear that their trades areunduly risky, just keeps them from doingtheir jobs.

If almost everyone within a financialinstitution is deemed responsible forrisk-taking, then no one really carries thecan. Designated supervisors should beheld accountable for the departmentsthey head, with the promise of sanctionsup to and including criminal liability forbad things that might happen on theirwatch. – Bloomberg

Vengeancewon’t bringcomplianceto banking

❚❚ DILBERT ❚❚ DIARY

Colonialism divided one Africa, one people

Brazil’s Rousseff must cultivate a global presence

Nkosi Sikelel ‘iAfricabecame the anthem for theentire region of southernAfrica.The kings andqueens of Africa were thegod-parents of the ANC.

STUNG by billion-dollar fines formalpractice on their tradingfloors, the world’s big banks areusing ‘fuzzy logic’ tools such asrelationship mapping and be-havioural analytics to read theminds of would-be cheats amongtheir traders.

On Wednesday six globalbanks agreed to pay $4.3 billion(R47.5bn) to settle claims that theyfailed to stop traders from tryingto rig foreign exchange markets,which came hot on the heels ofsimilar fines for manipulating

benchmark interest rates. Older systems to catch mis-

conduct, still in use at some firms,pick through conversations fortrigger words, but they can beeasily circumvented.

“Traders have moved on. Theyknow their communications arebeing monitored; they are usingdifferent channels and new words,”Richard Moore, the head of finan-cial crime and security services atDBS Bank in Singapore, said.

The latest technology hopes toovercome that via behavioural

analytics, using fuzzy logic, whichbuilds up an understanding of therelationships and probabilitiesthat might predict transgressions.

Moore said DBS employed ana-lytics experts in its complianceteam and was working on a mod-ule to extend the behavioural pro-filing of ATM transactions andcardholders to chats and e-mails.

“What we need is the ability toprofile behaviour, to know what isnormal behaviour and realisewhen it begins to change,” hesaid. – Reuters

Banks ambush possible cheats with ‘fuzzy logic’ tools

FINANCIALCONTROLS

Mark Gilbert

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❚❚ CONTACT

POLITICAL MARKMANSHIP

Mark Langevin

❚❚QUOTE OF THE DAYSuccess is not the key to happiness.Happiness is the key to success. If you lovewhat you are doing,you will be successful. – Albert Schweitzer, German philosopher (1875 – 1965)

Brazilian President Dilma Rousseff needs to work on developing a global political andeconomic voice. PHOTO: BLOOMBERG

REGIONALRELATIONS

Herbert Vilakazi

Part Two