Opinion and Analysis

You say on your front page that the rand is being hammered by the country’s growing current-account deficit, Current account deficit shock hammers rand (September 22).

While this undoubtedly had an impact, you neglect to mention another possible driver of the rand’s weakening: the grim prospect of a Zuma presidency: a candidate backed by an odious mixture of militant labour unions and the South African Communist Party.

How coincidental can it be that the day after Jacob Zuma’s case was dismissed, the rand suddenly plumbed record lows, especially given the fact that the current-account deficit is not new and has been a worrying factor for markets for a while now?

In the same edition of your paper, Congress of South African Trade Unions (Cosatu) economist Neva Makgetla calls for the further weakening of the rand in order to make exports more competitive, Rein in rand or forget about export-based growth.

What she fails to mention is that for South African labour to become competitive with Chinese workers, the rand would have to weaken to between R15 to R20 to the dollar.

This would probably involve super inflation, requiring huge interest rate increases to stem, something the Cosatu economist is strangely silent about.

She furthermore tries to pretend that the rand’s strength of late was due to an export boom. While there is some truth to this, the reality is that the artificial creation of a black middle class with no concomitant growth in productivity was what led to the unsustainable capital inflows.

This capital is starting to flee the country now that it is becoming clear that a Hugo Chavez-type presidency is in the offing.

Anton Barnard, Centurion

Sfiso Memela is absolutely correct, there is no need to emigrate to Australia should Jacob Zuma become our next state president, An unfair swipe (September 20).

I would, however, start saving up — the price for his services was after all established in the Shaik trial to be R500000 (and as far as I can remember, he never denied receiving the money).

Furthermore, I would buy shares in bathroom-related companies: after all, as a caring president, he would no doubt make sure that every South African had access to a shower — to prevent the further spread of AIDS.

Friedrich J Mueller, Brackendowns

With acknowledgement to Anton Barnard, Friedrich J Mueller and Business Day.