“There are two worlds, the one in which people are convinced they live, and the one that is considerably more dramatic, the one that is real”

Saturday, April 28, 2018

No water economics

Credits: Curbed

South Africa is running out of water, yet every day the push is to export more. Most of South Africa’s exports outside of mining are agricultural produce; most going overseas to the rich countries and through out that production process, goes South Africa’s (and Africa’s) water. 
South Africa will need “1.6 times the amount of water than will naturally be available by 2030”[[i]], said Professor Antony Turton of Free State University at a conference early 2018.
It is not a new horror: South Africa is water stressed [[ii]], always was. Cape Town is in the news now, but many unheralded municipalities apply restrictions nearly every year.
In the 1980s, we whites joked through the Highveld drought that turned lush-green White gardens brown. No worries then. The population that counted was so small; the available water was enough to keep the privileged clean and continue exporting to fund their extravagancies.
35 years on and the new South Africans have grasped nothing. Perhaps no one understands what Turton is saying: “long before 2030 there will not be enough”. “Save water, it’s precious” should be hummed every morning before we brush our teeth and let the tap run. Instead the government continues its support for Big Business as it exports even more of our precious water.
He said grape, I say gripe  
Our drive through the great waterless Karoo over, we stood at the view-site in the cold mist high above Franschhoek. I was filled with the beauty of the surrounding mountains, the Winelands stretched below. My friend saw only dollars.  
“That’s foreign currency stretched out there, earned by doing what South Africans do best – Exporting cheap! We’re lucky. Franschhoek is good for wine. Other parts are suited to produce Euros, pounds and dollars from tobacco, orange and apple, asparagus, even I guess President Ramaphosa’s buffalo, and so much more. Magnificent eh?”
“We took 95,775 hectares, emptied it, grew grapes and make about 900 million litres into drinking alcohol every year. Of that 60 percent is sold overseas [[iii]] importing the good life into South Africa.”
And tragic. Few people of KwaZulu-Natal have seen the hundreds of thousands of not needed hectares of sugar cane waving, few of Gauteng and the too many herds of cattle of the Highveld – South Africa’s land and water used for wrong reasons and/or to benefit foreigners first. Outside of the residents of the Paarl-Franschhoek-Stellenbosch triangle, a handful of Cape citizens have seen the patchwork spread below me where 84 percent of the total production is turned into alcohol.  
That is how globalisation works.
Free trade … a myth driven by the South African government and Big Business partnership.
There is nothing smart about selling one’s household’s essentials cheaply in order to pay for top-dollar stuff that are not really needed. Charity begins at home. That is particularly true when we understand that if our own citizens continue to be poorly fed the whole country – you, I and billionaire Ramaphosa too – will be dragged down. And it is happening. Playing the sell more-and-buy less-for-Rand game sounds like good business, but South Africa has made a particularly poor job of the most important trade balance – balancing water out, water in.  
“… Analysis of actual trade data revealed that South Africa has been a net importer (of hard goods) … over the past 12 years”[[iv]] aggravated by “net VW [virtual water] exports in recent years reaching more than 4 billion m3 by 2013” [[v],[vi]].
 “The water used in the production process of an agricultural or industrial product is called the ‘virtual water’ contained in the product.”
The quoted VW export figure is “net”, meaning it is calculated after recognising that South Africa is growing less of and importing more water guzzling crops such as maize, wheat and cotton. Even after adjusting the trade balance to reflect the importation of these “high water content” staples there is still a net loss of virtual water.
VW out, imports in
A small percentage of big-ticket-high-cost items are purchased by the rich, but most imported goods are snapped up by South Africa’s middle class consumers. The profits of the companies involved in the importation-onward sale cycle also find their way into the pockets of the middle class and above, now as owners and/or shareholders through their pension schemes/unit trusts/direct holdings.
The foreign currencies earned by agricultural exports do make life good, but mostly for those already enjoying good and it is mostly “good” in an unnecessary and extravagant way. As the Cape Town shortage has proved when the fountain empties it will be those who have taken water for granted who will suffer most.
Will South Africa wait until tap-dry-day to question how much water was exchanged for those imported luxuries and things lying unused in the hall cupboard, the garage?
Agriculture is thirsty
To produce to export (in order to import) huge amounts of water are needed: 1 kg of beef (on average) needs 16000 kg of water whereas the “production of a 32-megabyte computer chip of 2 grams requires 32 kg of water.”[[vii]] South Africa does beef not chips, and as the manufactured goods (of a few assembled cars, ball bearings, picks and shovels and weapons) South Africa exports “continued to decline (so) South Africa became more dependent on imports of manufactured goods …”[[viii]].
There is only so much water in the closed environment we call the earth. South Africa is giving its share away.
Change is ultimately a middle class choice. They are the game makers, and they have to decide whether they wish to live in South Africa longer. There are South Africans who, like my travelling companion mentioned above, advocate for making money now, get out tomorrow and live good elsewhere later. The result is: South African produce goes out, luxury cars, finished finest jewelry, designer clothes, Spanish stuffed olives, high end pharmaceuticals and beauty products come in. And foreign currency earned (accumulated) allows for transfer pricing, the export of billions of Rand as dividend flows, external investment, overseas holiday allowances and many more nation destroying activities.
South Africa’s dwindling resources
It is no surprise that South Africa’s biggest import bills are fuel and machinery. That is what is needed [for industries] to produce to export to the European Union, the United States of America and the Middle East [[ix]]. They have the wealth and/or capacity to produce what South Africa sells them cheaper and to a better quality, but this way they profit – it is financial colonialism. If we lived in a cooperative world the VW trade cycle would be reversed with South Africa accepting the water-filled products of the water-rich. Ramaphosa wouldn’t be visiting Her Majesty the Queen giving the country away – the Queen would be visiting South Africa accompanied by thousands of ships bearing water-saving gifts.
The greater the effort to prove that South Africa is an export champion, the greater the damage done to the real economy of not just South Africa, but also of the whole of Africa: One continent with finite resources of which water is taken for granted.
There is truth in saying that the coming water crisis lies in population growth, bad water use, poor management, commercial water losses and ecological degradation. Unregulated use is a serious problem – “235 litres per person per day”[[x]]. South Africa has little quality agricultural land [[xi]] and a lot of it became residential for the better off: Most houses have a garden with a pool and/or decorative lawns/plants even though the servants tending them do not have real and a varied food-diet [[xii]].  It is time to be proud of the carrots and cabbage grown where the roses were[xiii]; and not growing for export.
The bigger truth is that South Africa is being pushed to export. Naively the ANC complies.
The World Bank, International Monetary Fund, commercial banks and their rating agencies push exports to repay interest on monies borrowed in days gone by for imports and in support of West-dominated free (but unequal) trade. The rich countries get richer, the poor poorer – a wealth transfer process.
“So a glass of wine with dinner that requires five or ten or maybe 15 gallons of water to make? Don’t sweat it”, wrote Protea Wines. We should be horrified! Others estimate that 872 gallons (3300 litres) of water are used to produce 1 gallon (just 3.8 litres) of wine [[xiv][xv]]. And that happens at precisely the moment Southern Africa is heading for turbulent weather times – Climate Change is real.
The wineries are making a bomb [[xvi]] selling the nation’s water in wine to the United Kingdom (starting at £5-6 per bottle) at 0.06p/R1 per bottle [[xvii]] while the cost of bottled water in the UK starts at £0.75p per litre - R12.50 [[xviii][xix]].  
South African water-related exports don’t stop with wine, beefsteak. There have been “expansions in production of high value crops of very high water content (horticulture crops, mainly citrus fruits and vegetables … and tobacco)”[[xx]]. High value means bigger profits boosting the zeros on bank account statements. While the water disappears, the majority of South Africans have never had regular wholesome meals. What is happening is madness, national suicide.
Cape Town’s main feeder dam, Theewaterskloof, holds 480 million cubic metres. That means that the net export figure for 2013 that consumed four billion cubic metres [[xxi]] to produce is the equivalent of eight Theewaterskloof dams.
And there is – horribly – more at stake
The ANC is failing to see how incompetent water management and economic foresight is opening the path to partial and then (it follows) full privatisation of water. It was when Professor Turton made his forecast that “Catherine-Candice Koffman (of Nedbank) … stressed that South Africa’s banks are looking for developmental opportunities … rather than later, before government red tape made innovating in the sector a challenge.”
If the current attitude to mobile phones and texting is the example of life’s necessities, South Africans are in for a real shock when private enterprise, their banks and accountants own all the water. Just saying!  

* First published by Pambazuka News. See what they offer and consider making a donation please go to pambazuka.org/keep-pambazuka-free-and-independent
[ii] Water scarcity is now a real threat in two developing countries at the forefront of efforts to reduce climate change, India and South Africa … https://climatenewsnetwork.net/23742-2/
[ix] China features for mined goods mostly
[xiii] Nobody expects the busy middle class person to “home-farm” … let the flower garden free-of-rent to a squatter-camper, use the pool for composting.
[xiv] This Is How Much Water It Takes To Make Your Favorite Foods … https://www.huffingtonpost.com/2014/10/13/food-water-footprint
[xvi] “Almost a decade into democracy Malmsey Rangaka and her husband Diale swapped academics for wine farming …” @ http://www.destinyconnect.com/2014/09/19/mhudi-wines-a-growing-black-own...
[xix] ‘… the UK spends more than £2 billion annually on bottled water. The average Briton drinks more than 40 litres each year.’ See http://www.dailymail.co.uk/health/article