The Department of Communications is intent on establishing, almost from scratch, a set-top box manufacturing industry in South Africa, to build devices needed for the planned migration to digital terrestrial television.
The plan, according to an ITWeb article by Damaria Senne and Candice Jones, is to encourage previously-disadvantaged groups, including women, to enter the set-top box arena. According to the article, Lyndall Shope-Mafole, the director-general in the department, this is a good idea because "the country is loathe to rely on international suppliers".
Why? Aren't these the same suppliers that build the TV sets without which set-top boxes are just set-less boxes? Aren't these the suppliers on whom we rely to manufacture the devices most critical to our economic and social lives, cellular handsets? Why shouldn't we rely on them now? Are they our enemies? Do set-top boxes have powers of surveillance or destabilisation that the government would prefer to keep for itself?
Do these foreign suppliers not build quality products? And if they do so cheaply, would that not save our consumers plenty money that they could save or invest or spend elsewhere in our economy? Wouldn't that produce real economic growth rather than the illusory promise of state spending?
It can't be, because otherwise we wouldn't need to spend money that could be used for, say, housing or power generation, to develop a set-top box industry. At least we will now get to try the discredited economic policies of protectionism and autarky, so we can discredit them for ourselves. After all, independent confirmation of dumb policies would be useful to other developing countries.
This plan will "inject R4 billion into the economy", according to the department. True, but don't forget that this is R4 billion that was extracted from the economy first, by the taxman. Some gift, isn't it? (Ever wonder why the only government department that doesn't spend our money, but rakes it in, is also the only one that happens to be fairly efficient? Still think the economy is getting a R4 billion "injection"?)
Nevermind that Sentech, the state-owned monopoly that is responsible for the digital terrestrial television rollout, needs only a tenth of this kind of money to actually do the job it has been mandated to do - without which our "Proudly South African! Koop Suid-Afrikaans!" set-top boxes will be expensive paperweights.
Investing in our weaknesses
If such an investment had any benefit, wouldn't capitalists flock to supply the need?
Ivo Vegter is a freelance journalist and columnist.
Why do we need a niche electronics industry that competes with far more developed and far less expensive industries overseas? If such an investment had any benefit, wouldn't capitalists flock to supply the need? And what of the one company - Altech subsidiary UCE - that did invest in such capacity? Will it just be punished with DOC-funded competition for the risk it took, the customers it won, and the reputation it built?
What possible benefit can we gain from this inefficient and misdirected deployment of scarce capital and resources?
It may, indeed, create a few jobs. But it will create fewer jobs than might have been created if R4 billion hadn't been leeched out of our economic growth, and if South Africa were free to allocate capital and expenditure to where it buys the most value and does the most good.
Once we've all chipped in to set up this "industry", we'll have to pay a second time, to buy the boxes it produces. So even if they're priced competitively with what we could buy from those unreliable foreigners, we'll be paying twice. And that's not taking into account the subsidies for the poor. After all, television is a basic human right, guaranteed in our constitution. It's right there, in section... uhm... wait, it's part of freedom of speech, right? Freedom of expression is worthless without television screens blaring commercials and government propaganda at the mindless masses.
So South Africans will be paying thrice for the priviledge of having locally made set-top boxes. How proud that makes me! How self-sufficient! Maybe PW Botha was right all along with his Mossgas-style dreams of autarky. Who needs uitlanners, when a boer can make a plan?
At R4 billion, this project will cost twice what we're paying for an entire fleet of Gripens and Hawks of Arms Deal fame, and more than half the total historical cost of producing the Rooivalk attack helicopter. You might know it from airshows. But did you know that you were watching probably the only flying Rooivalk on the planet? Despite its much-vaunted reliability in sandy conditions and several major desert wars since its launch in 1990, the Rooivalk has the dubious distinction of having no customers at all. Zero. Other than the South African Air Force, where a dozen units languish, reportedly not fully operational and not deployable. Why? Because, as Keith Campbell wrote in a feature for Engineering News last year, South Africa simply did not have the capabilities to design, develop and manufacture a best-in-class product, and developing those skills were hopelessly time consuming, expensive and ultimately impractical.
Now the communist revolutionaries in Ivy Matsepe-Casaburri's department are proposing to throw R4 billion - not counting budget overruns and missed deadlines, with which the DOC is intimately familiar - at demonstrating all over again what happens if a country stops relying on its strengths, and instead invests in its weaknesses, solely to assuage its irrational fear of foreign trade.
"Loathe", was the word they used. What is the government doing spouting the economics of xenophobia, when immigrants are being set on fire in the streets? Why is it reinforcing the misguided view that foreigners are by default bad for our economy? And if they get hold of those subsidised set-top boxes for which we paid thrice over, would locals not feel justified in chasing them out of their houses and taking their stuff?
This latest idea is braindead on so many levels, it could only come from Poison Ivy's Department of Communisation.
Perhaps some DOC officials could use set-top boxes of their own. Reliable foreign suppliers say it provides extra intelligence the base device lacks.
* Ivo Vegter is a freelance journalist and columnist, who blogs at http://ivo.co.za/. He'll need something new to write about when Poison Ivy's ten-year reign ends next year.
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