Mzansi Afrika

From Johannesburg South Africa, a window on the world

Tuesday, June 15, 2004

Proudly South African

I always assumed that the Proudly South African campaign was a good thing, my thinking being that anything promoting local products and services (providing of good quality) must be good. Well, browsing through some back issues of Brainstorm magazine I came across an editorial by journalist Ivo Vegter, and in his opinion Proudly South African is nothing more than privatised protectionism, a state of affairs that leads to higher costs for consumers, hampers growth, and ultimately costs jobs.

He quotes an unamed trade policy institute explanation that imports don't cause a net loss of jobs. They may displace workers in less competitive industries, but overall employment levels are caused by monetary policy, labour market flexibility and other non-trade factors - which the article doesn't specify. This line of thinking goes on to say that trade benfits an economy in the same way as technology, causing resources to shift to more productive sectors, raising raising overall living standards.

According to Vegter, the view that imports are bad and exports are good, and that a country's trade balance should be positive,is a lopsided analysis.

"It ignores the fact that a trade deficit signals a net inflow of foreign capital into a country. This in turn lowers domestic interest rates, encourages new investment, and makes better prices, variety and quality available to both consumers and domestic manufacturers."

He goes on to say that promoting local products distorts trade by creating artificial benefits, in particular by funding joint marketing initiatives. "But at some point such a co-operative or oligopoly becomes indistinguishable from a cartel." And we are left with anti-competitive monopolies that restrict consumer choice, raise prices and can lead to unemployment.

I'm not sure that my knowledge of economic theories qualifies me to judge his arguements, but it does make for some food for thought. I do however think, that a positive spinoff of the Proudly South African campaign is that it has been good for nation building. For example, if you consider the batch of Proudly South African ads, currently airing on TV. There was some discourse about this in the local blogosphere quite recently. There was a time a couple of years back, when there was a lot of cynicism about the aspirational beer ads showing multiracial groups of people enjoying themselves in bars, or clubs - you know the scenario. People used to say they were unrealistic, you rarely saw mixed race groups when you actually ventured out into the real world of trendy bars. Now you see it happening often. I'm not saying that the ads were directly responsible for this positive change, but being aspirational, they did hold up an encouraging picture of what we could be like, of it what it would be nice for us to become as a nation. I think the Proudly South African ads do the same. They show us a vision of a happy, and prosperous nation and hopefully in time we will be able to move closer to that ideal. At any rate the ads make you feel...well, I hate to say it but....proud to be South African, and they make you want to be part of that whole cheesy happiness.

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