Dismal whingers must shut up and compete

Sometimes one just can't win, thanks to the multitude of dismal whingers pervading the financial markets and the economy these days.

At the peak of the rand rot in December 2001, when the beleaguered currency kissed R13.83 to the dollar, a brigade of outraged armchair and classroom commentators streamed out of the woodwork. They took the government to task on its HIV/Aids policies and its aloof attitude towards the Zimbabwe bogey that is mad Bob.

Others bemoaned the vagaries of globalisation and the emerging market contagion it fosters, and pointed an accusatory finger at debt-ridden Argentina.

Wherever they pointed an accusing finger, most seemed to agree that the country's fundamentals were not to blame. Furthermore, most agreed that the rand's performance was alarming.

Some blamed the Reserve Bank for failing to respond with a sense of urgency. Even the lion-hearted among us shivered and shuddered at the potential deleterious effects of a drastically weakened rand on inflation.

The poor, the underemployed and the importers of capital goods stood to take the brunt of the pain - and did!

Inflation indeed rose to double digits in 2002 and interest rate hikes of over 300 basis points took a bite out of the emaciated rand in the consumer's pocket. We had the Myburgh commission and its controversy, but all that is behind us.

The rand somehow found its footing again. What bugs me is that suddenly there is a whole new brigade of dissatisfied whingers who say the currency is too strong.

Too strong relative to what? Purchasing power parity?

Reserves?

Growth differentials?

Current account performance?

Interest rate differentials?

Or simply the lining up of the planets?

All I know is that we now have a free-floating exchange rate, however dirty that might be.

Shouldn't this send the ardent proponents of the dismantling of exchange controls into an intellectual orgasm?

Where were the exporters who profited from the weak rand?

Did they stand atop the Drakensberg to announce their good fortune and promise to create thousands of jobs for those suffering from inflation?

Did they promise to pay their workers hefty increments?

Alas! They quietly took credit for the profits and pocketed whatever bonuses they could lay their stubby fingers on. Now they whine that they will have to lay off workers because the rand is too strong.

The rand was trading at R6.77 to the dollar as recently as June 2000. How did they manage to run profitable businesses then?

In the end, true competitiveness comes from production efficiencies. Artificially manipulating the currency can bring temporary gains at best.

Didn't we learn anything from the beggar thy neighbour policies of old?

For years our importers learnt to live with a supposed one-way bet on the rand and had to implement hedging as part of business strategy. It seems exporters are about to start learning that lesson, too.

The trend may or may not be a short-term one. Heck, if I knew I would be retired and sipping a drink in the Caribbean.

The reality is some guys and gals out there have been finding some value in the comeback kid that is the rand.

For some time we have been tooting our horn that our fundamentals are right. Maybe the world is beginning to agree with us after all.

The exchange rate is essentially the stock price of the country and what shareholders whinge when their stocks rise?

So you can talk about dollar weakness all you like, at least I am not silly enough to believe that it is any different from rand strength. But in the name of Dornbusch please stop whinging.

Vincent Malunga of Stanlib Wealth Solutions writes in his personal capacity