Tag Archive | South Africa

Elysium: South Africa Light

Elysium-imax-poster-matt-damonLast night, I watched Neil Blomkamp’s science fiction opus Elysium, which was about as underwhelming as his previous work, “District 9.”

Though most American viewers will miss it, it’s impossible to watch Elysium without thinking of South Africa. Elysium is the name of a giant gated community in the sky that we mostly don’t get to see. The residents of Elysium live in huge mansions, complete with swimming pools and trimmed lawns. Most salient to the story is their access to medical care which allows them to live forever.

Elysium is propped up by a single corporation, which manufactures robots for use on Elysium as servants, and as security on Earth below. Our hero Max is a shanty town dweller and former criminal who works on an assembly ling of one of the factories. He gets hit with a lethal dose of radioactivity, and must get to Elysium to get medical care or die in five days.

Fine. What’s striking is all of the references to South Africa’s apartheid government, which propped up state protected private monopolies to keep and consolidate power for the white minority, while insuring a steady flow of cheap and disposable labor.

Max’s nemesis is the hulking Kruger, the only obvious South African of the film. We see him enjoying African BBQ and drinking Castle Lager, an obvious allusion to the South African 32 Battalion, sent to fight the communists in Angola and along the Namibian border during the 70’s and 80’s. In fact, his spaceship (?) has a (current) South African flag emblazoned on it.

The most despicable character of the film is dressed up to emulate IMF chairman Christine LaGarde. Oddly, Ms. LaGarde has deviated from her more mundane duties of monetary policy and gone militaristic, happily shooting down ships filled with crippled children looking for medical care.

In the end, the computer controlled hegemony of Elysium is toppled, though, not through the collective uprising and political struggle of the poor majority, but through the nameless efforts of a smuggler. Blomkamp, for all his detailed references to South Africa’s history, delivers it a cheap shot by excluding this important detail.

Of interest, though, is the final move from a designed state protected private economy, to a presumably socialist economy, where health care is available for all. While I like the move to freely available and quality health care for all, it’s odd that the film doesn’t do much to address how the economy is to move forward.

But the economic questions are the most perplexing of the movie, but then the economy of the South African apartheid government and even the present government are perhaps equally bizarre. Why would even the most wealthy concentrate all their wealth into a single, non-competitive space? We can assume that the wealthy in Elysium are obtaining socialist kick backs from their oppressive form of government, but it doesn’t make a whole lot of sense that someone on Elysium wouldn’t go it alone and seek other opportunities. In this sense, the people are Elysium are at least as oppressed as those on Earth. You’d wonder how they’d put up with it. Wouldn’t someone get bored?

Also, with so many humans on Earth, you’d assume that someone might think of this as a major opportunity for investment. It’s pretty clear that the people on Elysium don’t have to use cash, but on Earth, the potential for grass roots markets seems limitless. One of the main characters of the film has tapped into the market of smuggling people up to Elysium for medical care. The entrepreneurial spirit is alive on Earth. Wouldn’t someone on Elysium try to tap into this, reacting to market demand and helping people at the same time? This was certainly the story in expanding access to HIV antiretrovirals in Africa (in a really, really simple sense, don’t flame me, man!). There’s no reason to assume the same wouldn’t play out here.

But that’s asking too much, and I digress.

Elysium’s two dimensionality is really what hobbles the film. Like District 9, what could have been a really clever allegory for unequal societies and the structural problems which produce and support them, Elysium fades off into a bland world of polarized, Hollywood science fiction. It fails to explore how humans push back against inequality and fails to educate its audience as to what it all means. Blomkamp clearly understands the issues. Hopefully, he’ll deliver the goods next time.

The cost of shipping things to Africa

road (2 of 1)-2I was in Durban, South Africa a couple of weeks ago. It turns out that Durban is the busiest port in all of Africa. There are 57 berths and more than 4000 ships load and unload cargo in Durban every single year. The port is open 24 hours a day, seven days a week. Though the largest port in Africa, it is only about half the size of the port of Los Angeles and not even a tenth as big as the largest port in the world, Shanghai.

The Durban port, however, is expensive. It is more expensive to park a ship at Durban than in any American port. Boats must sit in port an average of four days to clear and unload at a cost of nearly $200,000 per day. Owned by a single private company under few restrictions, Transnet is free to charge what it likes and offer service of any quality it likes. In Africa, there are few competitors.

Kenya’s port in Mombasa is even worse. On average, ships must wait nearly nine days in port. The Mombasa port is run by the state owned Kenya Port Authority.

After totaling up costs from extended time at port, onerous duties and fees on imported goods, numerous police “checkpoints” and “inspections,” a single container imported at Mombasa and shipped to Kampala, Uganda can cost nearly $4,000.

Exporting goods is no cheaper. While it takes only 10 days and costs only $1,000 to export a 20 foot container in OECD countries, it takes nearly 40 days and costs nearly $3,000 in the East African Community. If Kenya, for example, really wants to get serious about positioning itself as an export economy, it will have to tackle this major, major problem. Goods sitting in port waiting for “documents” lose value through export fees, storage and lost market opportunities.

Nearly 20% of goods shipped into Mombasa are retail goods. The costs of onerous shipping conditions are, or course, passed on to the consumer. Kenyan and Ugandan consumers pay more in shipping of imported goods as a percentage of the total price of an item than do Americans. Africa has the highest transport costs in the world.

Again, I don’t know why I went down this road, but I’m often thinking of reasons for Africa’s hobbled development. I began to consider the simple costs of goods. Transportation costs amount to more than 30% of the operating expenses of an African business. Minimizing these costs would mean that businesses could potentially reduce prices and increase sales volume. Others share my view:

The Mombasa-Nairobi segment takes on average 29.8 hours, most of this time spent at various regulatory delays, such as waiting at the two weight stations (+ 6 hours), delays to several police checkpoints (+2 hours; there can be 8 to 10 such checks for the 430 km journey) and other driver delays such as rest and personal errands (+ 11 hours). Under normal circumstances the latter would be unnecessary for such a short distance, but the various regulatory delays force the driver to rest a night during transit. A similar distance in North America would be serviced in less than 6 hours. Therefore, such a system hinders economic development because supply chains tend to be unreliable while consumers and manufacturers pay higher prices for goods and inputs. In such a setting, various public authorities are using freight transportation to generate income in a rent seeking (predatory) fashion.

It is not clear that Kenya is using money from ports or “checkpoints” to upgrade current services. I am fairly certain that the money is going into public sector employees’ pockets.

It’s easy to blame “corporate exploitation” for just about everything that’s wrong with Africa. However, there are basic structural problems which complicate doing business there. Just as it costs money to get things in to African countries from port, it costs money to get things out. Until Kenya, for example, upgrades their port facilities and relieves restrictions on trade, the cost of doing business in Africa will remain high. Contracts negotiated by international entities will continue to be unfavorable.

In short, the problem with Kenyan business is only partially with international business. The Kenyan government parasitically profits of the current inefficiencies. Until that problem is mitigated, the poor will continue to pay a premium for just about everything.

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