Mandy de Waal

How happy are you?

Isn't it high time the South African government understood how to enhance our gross national happiness?

South Africa is one of the unhappiest nations on this earth. We're not as miserable as Zimbabwe, Sierra Leone, Ethiopia or Angola, but we come in at a lowly 118 out of 143 nations measured in the Happy Planet Index. A survey conducted by the New Economics Foundation, the Happy Planet Index reveals "the ecological efficiency with which human well-being is delivered".

The Happy Planet Index is similar to Bhutan's concept of Gross National Happiness, which puts the well-being of people and the planet first when making economic policy. It is a pioneering way of measuring national 'success', which was introduced in 1972 by the then King of Bhutan, Jigme Singye Wangchuck.

The drive behind this unique way of looking at economic development was Buddhist spiritual values, and it remains Bhutan's central focus for matters related to economic growth and development. This approach is a radical departure from most other countries that make productivity and economic growth the driving force of their vision and strategic planning.

Replacing productivity with happiness
There are four pillars when it comes to the Gross National Happiness model, and Bhutan has learned that 'happiness' is driven by sustainable development, the preservation and promotion of cultural values, good governance, and the conservation of nature. If those four aspects are in check then the rulers of Bhutan know they are on the right track to enhancing national happiness.

Little wonder then that Bhutan does well in the 'happiness' survey, and currently ranks as the 17th happiest country in the world. The 10 top happiest places in the world, according to the index and listed in descending order, are Costa Rica, the Dominican Republic, Jamaica, Guatemala, Vietnam, Colombia, Cuba, El Salvador, Brazil and Honduras. Other happy hotspots include Nicaragua, Egypt, Saudi Arabia, Philippines, Argentina and Indonesia.

Sad state: South Africa comes in at a lowly 118 out of 143 nations measured in the Happy Planet Index.

What's interesting about Costa Rica is that apart from having the highest 'happiness' score, it has the second-highest average life expectancy in the world, second only to Canada. Then notice how many of the happiest countries are situated in Latin America, or are islands?

Money can't buy contentment
By contrast, how happy are developed nations? It appears that wealth can't buy happiness. Rich developed nations fall in the middle ground, according to the index. The highest placed is the Netherlands at 43, with the United Kingdom coming in at a midline medium, scoring 74 out of 143. Like South Africa, the United States isn't fairing too well and is in the bottom percentile, taking up position 114.

Unfortunately, misery seems to be a sub-Saharan epidemic. The report says the “bottom 10 Happy Planet Index scores were all suffered by sub-Saharan African countries, with Zimbabwe bottom of the table, with a Happy Planet Index score of 16.6 out of 100.”

In summary, the report says: “The countries that are meant to represent successful development are some of the worst-performing in terms of sustainable well-being.”

Happiness doesn't cost the earth
Launched in July 2006 as a radical departure from the world's obsession with GDP, the index identifies “health and a positive experience of life as universal human goals, and the natural resources that our human systems depend upon as fundamental inputs. A successful society is one that can support good lives that don't cost the Earth,” the report reads.

This thinking behind the Happy Planet Index and Bhutan's Gross National Happiness concept is starting to resonate with the rest of the world. The Organisation for Economic Co-operation and Development (OECD) is looking at new ways of measuring progress that will focus on human well-being. In March this year, the UK's All Party Parliamentary Group on Wellbeing Economics met for the first time to look at well-being as a national meter, national goal and complementary measure to GDP. Well-being and happiness projects have been launched in Belgium, Italy, Canada and Australia.

Back home, a tsunami of stories on greed, corruption and self-interest flood the South African media, while our leadership is enraged in debates about nationalisation and other mechanisms to enable crony capitalism, entitlement and quick access to high paying government work. This debate, often reframed with racial metaphors, attendant name-calling and mudslinging that further obfuscate the real issues at hand.

Before the next round of service delivery riots begin, perhaps our leaders can leave the cursing and corruption aside for long enough to ponder on the concept of happiness. Perhaps they could learn from what other nations are doing to build national well-being, and start becoming obsessed with improving South Africa's gross national happiness, instead of wealth, privilege and power.

The Eskom Power Crisis

Eskom's management mess comes as no surprise, given the state of the operation, regulatory rot and the leadership crisis at other parastatals.


The leadership crisis that's shaken Eskom is symptomatic of the deep rot that lives within that organisation, and most parastatals that have enjoyed the privilege of government regulation.

That Eskom's management has reached an impasse is just a metaphor for the organisation's catch-22, and the struggle the utility is experiencing as it tries to climb out of the deep, dark pit it has dug for itself.

To get an idea of just how much trouble Eskom is in, let's rewind to Bobby Godsell's appointment as chairman in mid-2008. It didn't take too long for Godsell to go on record at an industry function and declare that this country's power utility was run no better than a 'spaza shop'.

Public utilities all over the world struggle to develop or maintain a business model that funds current operations, the replacement of plant and future growth, Godsell said at the industry function hosted by EE Publishers earlier this year.

“The problem with cashbook accounting is that it provides neither for yesterday, nor for tomorrow,” said Godsell, explaining that Eskom couldn't effect meaningful long-term funding or planning, and even had to battle for short-term revenue.“We screwed up!” Godsell said at the same event. “We at Eskom need to follow the example of the new US president and simply say we screwed up.”

Dire consequences

The screw up is that the public utility that supplies 90% of SA's power hasn't invested in infrastructure and has sold electricity at sub-economic prices. South Africans have benefitted from cheap electricity, as has industry. And then there are legacy deals that the mining industry has with Eskom that offer energy at ridiculous low or subsidised prices. By doing this, Eskom has effectively run a financially unfeasible operation and disallowed the accumulation of any wealth for capital investment.

At the same time, Eskom has mismanaged coal supplies, plunged the country into wide-scale blackouts, disrupted the mining industry for the first time since the Anglo-Boer War and shut out meaningful competition.

This regulation and control of the power industry has been done hand in hand with government, and is akin to the ineffective and damning manner that the telecommunications industry was regulated. Just as government interference in the telecommunications sector hurt and hampered SA's economic well-being, so too the over-regulation of the power industry is damaging our country's economy, and will continue to do so for the foreseeable future.

The leadership debacle is yet another symptom of an organisation that has gifted SA a power mess, bungled load-shedding, mismanaged coal stockpiling, seriously affected the mining industry, costing our country billions.

From a regional perspective, Eskom has been no better than a bully boy that has enjoyed the fruits of a cartel-like structure. The result of this regulation is the energy catch-22 SA finds itself in. This while management is afforded bonuses and housing loans, and allowed to squabble and deconstruct in full public and global view ahead of 2010.

Oncoming train?

Fortunately there is light at the end of the tunnel. Eskom's price applications to the National Energy Regulator and the South Africa Renewable Energy Feed-in Tariff mean consumers will start paying more cost-reflective prices for electricity.

Entities that buy power from renewable energy generators will have to do so at a higher cost. This could lead to a more realistic power economy and stimulate the creation of independent power plants.

However, Eskom and government will have its hands full managing the impact of competition, and the effect rising prices will have on the poor. Strongly differentiated tariffs will need to be used to ensure the poor aren't further marginalised.

More positive is the news that independent power producers are organising to take the utility on in an effort to level the playing fields. The newly formed South African Independent Power Producers Association now offers independents a coherent singular voice to lobby government, the regulator and Eskom.

Eskom says it is resolving the capital expansion problem and will spend R385 billion in nominal terms on capacity expansion during the next five years. It says the financing of Eskom's capital expansion plan will come from three main sources: a shareholder loan, external debt and revenue.

Government has made a significant contribution through a R60 billion loan, which means the plan will largely be financed by the South African taxpayer who will also be burdened by increasing energy prices.

As a national utility that supplies the bulk of SA's power, Eskom's brand and reputation is intimately tied to that of SA's. If Eskom ‘screws up’, South Africa is significantly affected.

It's time for the board to maturely realise a greater good and understand the ineffable harm its egotistical power struggles are causing this country.

The future is fraught but what is sure is that like the telecoms industry, competition is desperately needed in the energy industry. Eskom's grip on our regional power economy must end, independent power plants must be enabled and the management crisis must be effectively resolved.

Values and the price of capitalism

The recent release of Naspers’ results was marred by a reputation scandal after it was revealed that Paarl Web, a subsidiary of the Cape Town based multinational media company, printed Zanu-PF pamphlets for the Mugabe regime. Read Naspers and the trail of Mugabe’s blood money as well as Mugabe’s man unmasked on MoneyWeb for background. You can also listen to the interview I took on SAfm with Alec Hogg for further context.

The story raises a number of interesting questions about capitalism, values and the role of journalism in society. I was chatting to my good friend and mentor, Jerry Schuitema about this. An economic journalist with decades of experience, Schuitema is the author of the recently published Value through Values. In short the book challenges the validity of the understanding of capitalism based on self interest, and details how transaction from a contributory point of view would address many of the current problems facing the economic world.

“Ten years ago business existed purely to make a profit, and did not concern itself with ethics and morals. The only concern was that it shouldn’t break the law. If you extend that pure profit motive thinking to Naspers and the Mugabe money, then why shouldn’t Naspers have printed that electioneering material?” says Schuitema.

At the time when the job was briefed in to Paarl Media, Morgan Tsvangirai had yet to depart from the election process and it could be argued that the printers were serving a client, supporting the election process and making money for their shareholders. They certainly hadn’t broken any laws. Why the big media fracas about the fact that they were merely exercising their capitalist want?

It is not as if they were selling arms to Mugabe. There are arguably more gross forms of capitalism like McDonald’s selling junk food and contributing to growing global obesity, or tobacco companies selling products they know are harmful to their customers.

Looking at the Naspers story one needs to question why their leadership was embarrassed about printing the Zanu-PF material. The response to the media coverage, and statements made by Hein Brand (“there's no way we could have consciously had peace with this”), Stephen van der Walt (“this is a deeply regrettable circumstance”) and Koos Bekker (“of course that's embarrassing to us and a great pity that it happened”) point to the fact that this is behaviour that Naspers is ashamed of.

“This is because they have missed the point,” says Schuitema. “Business has only one overriding value and that is to care for their customers and care for others. Industry should serve markets by serving their customers, and make a profit by doing this well. The embarrassment of Naspers was, I believe, caused by their absolute drive for profits. What a vulgar blight. That the propaganda material supporting a corrupt and murderous government was printed solely for cash.”

And there’s the rub. Business will always be on the back foot if it is chasing money. If decision making is informed solely by money, how can business motives ever be right, or noble, or filled with any values?

However if industries’ overriding principle is to serve their market, their position of defense is infinitely stronger. If the overriding value is that you care for others (the basis of a free market system) you will be well guided through the toughest business challenges. However if you are purely guided by profits and complete self interest, prepare to include a huge budget in your business for reputation experts and spin doctors in the hope they will clean up the damage, and scandal you leave in your wake. For then your sole motive is greed, and that which would fatten the purses of your shareholders. Then it doesn’t matter if you do business with cruel dictators, murderous despots or satan himself. As long as you’re not falling foul of the law it doesn’t matter because there’s no moral compass to guide you. 

Lastly what is the role of the media in all of this? My view of journalism is that we are the fourth estate. The concept of the fourth estate goes way back to Thomas Carlyle in the first half of the 19th Century, but is best summed up by novelist Jeffrey Archer in his work “The Fourth Estate” when he made the observation: "In May 1789, Louis XVI summoned to Versailles a full meeting of the 'Estate General'. The First Estate consisted of three hundred clergy. The Second Estate, three hundred nobles. The Third Estate, six hundred commoners. Some years later, after the French Revolution, Edmund Burke, looking up at the Press Gallery of the House of Commons, said, 'Yonder sits the Fourth Estate, and they are more important than them all.'"

As the fourth estate the media are the guardians of democracy and defenders of the public interest. It is therefore the role of the media to force transparency and shed a light on what business (or politics) would prefer to keep hidden so that there is robust and open public debate. It is not the job of journalists to try and change society, rather to stimulate society to discuss what should be changed.

Illustration from Mono Lito.

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