Free market - goverment get out of the way

[duncan drennan]

A message from Koos Bekker that the government really needs to "get",

“There are basically two regulatory models,� says Bekker. “One is, I as the regulator needs to conceive a service and set it and approve it and then we launch it. There’s another model that just says: ‘I don’t know which will succeed, most new things in fact fail, but let me open the market and everyone who wants to run, runs. Whoever wants to compete, do so. Most of you guys will fail. Tough. That’s the world.’�

Full article on MyADSL

[Dave A]

And this about sums it up.

“You know, in 2000 we had 50% of the internet connections in Africa, of the whole continent,” he noted on the Moneyweb Power Hour Tuesday.

“Today South Africa has less than 25%, and falling, and I mean we have got practically no broadband – in a few hundred thousand homes. In Korea, for example, about 73% of all homes have a massive broadband, enough to show a movie on.”

Worse still, not a cent of government funding is required to bring South Africa up to speed, argues Bekker. “All it needs is for government to just get out of the way, open up the market, let people compete, and the private sector will mobilise the money to actually bring us up to date.”

Bekker says that unless we get the regulatory breakthrough, the position won’t improve.

Ivy has extended Telkom's monopoly as opposed to ending it as she had indicated earlier.

[duncan drennan]

I had a pretty interesting conversation with a good friend of mine a couple of weeks ago. It started off with me taking a highly capitalistic approach to how the SETA's are being run, and him a socialistic one (I think that is how it would be described).

The premise was that there is a lot of money floating in the SETA system that is lying around unused. All the SDL levies are taken, but business finds it difficult to access the money. We both agreed that the system is a good idea if it works.

I took the stance that business is more efficient with money (it would never let it lie around), and would therefore be able to use the money to grow. The impact of growth is the need for skills, the need for skills leads to development of the workforce, i.e. training occurs as a result of growth (and therefore profits), else growth is limited.

He approach was that if business had the money they would not use it to train, but it would just enrich the people at the top. It is better to force them to up–skill labour by having the SETA system in place. He is an independent trainer (does a lot of training for Toyota's sales force).

Eventually we got to the point were we did agree that there are merits in privatising some government systems. The government would tender the job out, and then act as a regulator. That way the incentive for the people running the system would be a financial one, and they would have to make use of the money effectively else they could just be be supplanted by another company offering the same service. The key for government would be to monitor the whole thing. The private sector has a motive to be efficient with the money.

I'm sure there are plenty of places where this kind of thing could go wrong. Maybe I've just become a capitalist and believe that a free market could possibly have a greater impact on out society than a highly regulated one.

[Dave A]

The real problem with the SETA system is that it got overcomplicated with the SAQA system. Department of Education took an ivory tower approach to the training when we need a rugged, to-the-point training program.

The other weakness was the mandatory grant system - a virtual waste of 50% of the funds that could have been used more effectively if applied directly to training funding.

With the benefit of hindsight, most involved concede it could have been done much better. However, there are drastic changes in the pipeline which might improve the effectiveness of the program.