Page 86 - Monocle Quarterly Journal Vol 1 Issue 1 Q4

BANKING
“Frequently, and particularly more recently, stagnant growth and continued sti ing inequality is blamed either on externalities or on the idiosyncrasies of leadership.”
Tobacco-made cigarettes. ey would watch the rugby whilst keeping an eye on us in the pool.
e extent to which things have changed since the 1970s is dramatic. is country has had, for some time now, the most liberal forward-thinking constitution ever written – in any country, anywhere. Our freedoms are guaranteed. Two decades of self-realisation through the implementation of democratic principles, and our inclusion into the international fold, have made South Africa and its people change enormously.
Nevertheless, in spite of these freedoms, and in spite of tremendous structural change, the economic reality for many in this country has altered very little. Frequently, and particularly more recently, stagnant growth and continued sti ing inequality is blamed either on externalities or on the idiosyncrasies of leadership.
ese externalities are often the same kind of externalities that any emerging economy with a heavy reliance on commodities would cite: the pull-back in Chinese demand, the falling copper price, the oversupply of steel. ese are the structural arguments; the medium- to long-term reasons given for lacklustre performance.
In the short-term, one recognises clearly that the enormous gyrations in the value of the currency, and the immediate impact this has on the ‘markets’ – meaning bond prices and the value of JSE tickers – are primarily driven by the notion that the utterances of leadership itself are events, rather than utterances only. ese are not structural impingements, but the fear is that they could become institutionalised.
What is not spoken of however, what is analytically absent, is the extent to which the nancial markets – in spite of all of the remarkable changes we have experienced as a society – have not changed very much. is is not because the economy has not changed. e economy today is radically di erent to what it looked like in the 1970s. It is the markets that look distressingly similar to apartheid South Africa. e markets have become substantially, audaciously, out of sync with our economy.
Just a few facts elicit this. Looking at the JSE holistically and then drilling down, one notices that SAB Miller and Anheuser-Busch – two enormous beer-making rms that are set to merge after international competition commissions approve their ZAR 1.5 trillion deal – constitute as of the time of writing 27 percent of the total value of the JSE. at is remarkable: the brewing of beer is valued by investors at over a quarter of
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