Tuesday, January 3, 2012

2011 - By News 24


ANCYL Julius Malema was suspended for five years, meaning he must step down as president of the ANC's youth wing, a party disciplinary committee ruled. The charges against him referred to calling for regime change in neighbouring Botswana, unfavourably comparing president Jacob Zuma to his predecessor Thabo Mbeki and storming into a meeting of top ANC officials.

Andries Tatane was killed allegedly by a group of policemen during a protest in Ficksburg, Bloemfontein. He had challenged the officers to spray him with a water cannon during the protest march. Six public order policemen have been charged in connection with the death of Tatane.
National Police Commissioner General Bheki Cele was suspended pending the outcome of an investigation into "unlawful" police lease agreements. This came after the Public Protector Thuli Madonsela found that Cele's actions involving the procurement of two building leases for new police headquarters, valued at R1.6bn, were unlawful and amounted to maladministration.
Gwen Mahlangu-Nkabinde was axed after the probe of the controversial building lease. Her decision to allow two controversial building leases valued at R1.6bn to go ahead, despite tender procedures not being followed and legal advice to the contrary, amounted to maladministration, according to a finding by Public Protector Thuli Madonsela.
Sheryl Cwele, the wife of the state security minister, and her Nigerian co-accused Frank Nabolisa were sentenced to 12 years for drug dealing by the Pietermaritzburg High Court. They had pleaded not guilty of dealing or conspiring to deal in drugs, procuring a woman, Charmaine Moss, to collect drugs in Turkey, and procuring another woman, Tessa Beetge, to smuggle cocaine from South America.
Hundreds of protesters gathered outside Parliament, Cape Town, in protest of the passing of the Information Bill.
The Protection of Information Bil was passed and it could see whistle blowers and journalists who publish "classified" information jailed for up to 25 years.
A South African woman was executed in China by lethal injection for drug smuggling after rejecting last-minute pleas for clemency. Linden, 35, was convicted of trying to sneak three kilograms (6.6 pounds) of methamphetamine into the country in her luggage through the southern city of Guangzhou in 2008.
Hundreds of people were left homeless, when a tornado tore through the Duduza township near Nigel, east of Johannesburg. Several people were also injured.
The 17th United Nations Conference of Parties (Cop17) was held in Durban. The conference focused on efforts to move toward a future agreement to legally bind all nations to emissions targets, including China and the United States.
Protesters gathered outside the JSE in Johannesburg to march against alleged corporate greed. The protests began in Canada and spread to cities across the US, Asia, South Africa and Europe.
23-year-old Nolubabalo "Babsi" Nobanda, from Grahamstown in the Eastern Cape, was caught by Thai authorities for trying to smuggle 1,5 kg of cocaine matted in her dreadlocked hair. She is set to appear in court in three months' time.
Democratic Alliance member Lindiwe Mazibuko was elected as the leader of the DA group in South African Parliament. At 31, she is the country's fourth youngest parliamentarian.
Supporters of the Dalai Lama protested outside Parliament in Cape Town, to push for a visa to be granted to the spiritual leader. The visa was never approved and the Dalai Lama couldn't visit the country to celebrate Archbishop Tutu's birthday.
Prince Albert II of Monaco married Charlene Whittstock from South Africa
Table Mountain was provisionally named a New 7 Wonder of Nature following a three-year global race to choose the world's seven most wonderful natural sites.


Never in our lifetime has the future been in a more uncertain state.

Obviously, neither Chantell Ilbury nor I experienced the horrors of the two world wars of the last century. So the phrase that change has become more extreme is simply not valid. However, the potential for major upsets is huge; and it is against that backdrop that we offer our list of events, trends or issues that could make headlines in 2012:
1) Red Flags Rising
In terms of the global economy, we have upped the probability on the “forked Lightning” scenario of a double dip, where the second crash is even bigger than the one of 2008, to 20% (from 10).

The reason is that one of the flags for this scenario has always been a sovereign default of note. Italy and Spain are candidates, the crucial thing to watch being the interest rate on their 10 year bonds. If it jumps above 7% for a prolonged time, the servicing of the bonds becomes problematic given the challenge of reducing the overall deficit.

The hike in interest payments will overshadow the cuts in government expenditure affected elsewhere to improve solvency. The deficit will thereby worsen creating a vicious circle of even higher interest rates. Greece has already entered this downward spiral.

In regard to South Africa, we have raised the probability on the “Failed State” scenario from 10 to 15% following the passing of the Secrecy Bill. While the main flag for the scenario remains the level of violence which is certainly nowhere near what is happening in Somalia, Afghanistan and Iraq, a subsidiary flag was the gagging of the press.

The latter could cause a massive leap in corruption as there will no longer be the counterbalancing fear of exposure. Critical factors to watch now will be the scope of topics defined as secret and the magnitude of punishment meted out to journalists found guilty of breaking the law.

Both scenarios are still outsiders, but have become more heavily tipped to challenge the favourites.
2) Dances with Wolves
The recent climate change conference in Durban has only revealed the deep divisions that still exist between nations on how to handle the issues. The upshot was to kick the can into convocation in two years time.

Accordingly we attach a 90% probability to one scenario “Dances with Wolves” in which the super-emitters like China and America carry on their dirty dancing act regardless. Alas, “Strictly Ballroom” – a tight agreement forcing nations to waltz together towards clearly set reductions in carbon emissions – is given a wild card probability of 10%
3) Fragile China
Last year we showcased “Ultraviolet”, a scenario where advanced economies were caught in a U-shaped trap of lacklustre growth while emerging economies were enjoying a V-shaped recovery, as our favourite to win the race over the next five years.

We have now switched back to “Hard Times” for everybody, the flag being China’s future GDP growth rate. We are less convinced that China can contain or exceed 8% per annum for two reasons: exports are 38% of China’s GDP and exporting into a flat Europe is taking its toll; and there are two indications of an imminent bursting of the property bubble which could lead to defaults on loans provided to municipalities by Chinese banks. If China dips below 5% economic growth, all the countries which supply resources to China will feel the heat too. We are now 60:40 on China having a soft or hard landing versus a continuing boom.
4) American Civil war (Part 2)
Relations between Democrats and Republicans have taken to an all-time low, just when co-operation between the two parties is essential to get America’s finances back in order. The focus has been on Europe; but it could easily switch to America if inflation picks up unexpectedly and interest rates rise.

Nevertheless, its economy is in better shape; and it is a unitary state capable of fixing things in a way that Europe – without establishing closer fiscal ties between its members – cannot do. It remains to be seen whether the presidential election will degenerate into an all-out war between the candidates.
Given the widening gap between the rich and the middle class and the poor caused by the recession; social unrest cannot be rules out. Meanwhile, it is unlikely during an election year that any meaningful solution will be found to the escalatory cost of government health and welfare programmes.

Democracy and austerity are uneasy bedfellows. But if anyone can find a way through, the Americans can. Never count them out.
5) Syrian Showdown / Russian Spring
2011 will be remembered as the year of the Arab Spring which toppled regimes in some countries and continues to be a revolutionary influence in others.

The jury is still out on whether genuine democracy and a better life for all will result from what has happened so far. The situation in Syria with its ties to Iran and its proximity to Israel could have far more complex and explosive repercussions.

The surprise is that the Russians seem to have caught the bug too with all kinds of implications for the nation possessing the second biggest nuclear armoury on Earth. Rightly, Time magazine has named the protester as its person of the year.
6) The Age of Intelligence
We have through the Age of Industrialisation and more recently through the Age of Knowledge, and currently stand at the dawn of the Age of Intelligence.

With all the tools and machinery of the first era and all the information at our fingertips from the second era, we now face challenges of much higher complexity demanding a huge leap in the quality education, skills, creativity, and all-round intelligence. Nations that understand this will do better than nations which remain blissfully ignorant.

Companies that apply their intelligence to engaging new producers and services which offer value for money in the “Hard Times” scenario will continue to grow and flourish. Unintelligent companies will go to the wall. Individuals who demonstrate versatility of skills and flexibility of mind will make a good living. Those that fail to adapt will limit their chances.
7) The Dutch Disease
Last year we talked about more smacks from Mother Nature. Sure enough, she duly delivered those smacks in Japan, New Zealand and several other countries.

This year is the risk that deadly strain of bird flu – a genetic mutation of H5N1 into a highly infectious influenza transmittable through coughing and sneezing – could escape from the laboratory that created it in Rotterdam. H5N1 kills 60 percent of the people it has infected.

The knowledge of how to manufacture the new strain could also be leaked to terrorist groups. With seven billion inhabitants on this planet, with the concentration of a large portion in megacities and increased mobility offered by travel by air, sea, rail or road, the danger of a global epidemic always lurks in the background.
8) The Year of the Bull
Our mainframe scenarios for South Africa are “Premier League” to which we assign a 50% probability and “Second Division” which we give a 35% probability.

If you take into account the 15% probability for “failed state”, we are now at a 50:50 ratio between good and bad scenarios. In other words, we are at a second tipping point, the first one being in the early 1990s when we could have tipped into civil war. Fortunately, Codesa 1 and 2 produced a new constitution and a free and fair election in 1994.

The real issue at the current tipping point is no longer political freedom but economic freedom. South Africa still has a highly exclusive, lopsided economy plagued by an unacceptably high unemployment rate.

At the same time, 2012 is a year of note for the ANC starting with centenary celebrations through a debate on national economic strategy and ending up with a leadership contest. Will the young, radical bulls in the kraal push through their nationalisation and land expropriation agenda: or will the older, more experienced bulls prevail?

We would prefer 2012 to have another forum for creating a new economic blueprint: a Codesa 3 involving all the major economic actors. Only a joint approach will succeed.

Otherwise, it could be all bull.