South Africa Program 2017

ECONOMY – Comparative Aspects Germany/South Africa

12.01.2017

As a future Chartered Accountant, it is inevitable that I will contribute to the South African Economy. I do, however, seek to go above and beyond my "call of duty" as a future CA(SA) and do more for the sake of Economic growth but most importantly, Economic emancipation in South Africa. For that reason, matters of Economy interest me.

From the interactions I had with Germans, my observations and also from the reflective conversations I had with my fellow TSAP participants, I think it's safe to conclude that income inequality is not much of a problem in Germany(at least not as much as it is in SA). Most people are skilled, well compensated and are leading a high standard of life. This is something that I've particularly paid much attention to as South Africa has been battling with high inequality levels for years now. Germany has an alternative option for students who are not academically inclined, they have a lot of trade schools, thus, it's not only those who do well in school that stand a better chance of making it in life but everyone since attention is paid to each student's special skills, and enhancement of that skill thereafter. I know South Africa also has trade schools but there's still a class problem that we face in SA. There's still an inferiority undertone that comes with trade schools, which hinders the growth and promotion of this great alternative. The high wage differentials in SA reflects the dividing line that separates the few skilled workers from the unskilled, who also happen to be the majority. I think we can learn from Germany if we want to decrease these differentials. Trade schools will help produce more skilled workers.

One thing that both countries seem to struggle with is gender inequality. In both countries, males still get paid more than their female counterparts, on average.

We went on factory tours and it was very interesting to see how automated production is in Germany. This has so many advantages such as less production time, less employee costs, less human error, increased volume of production and higher quality of production, etcetera. I noticed that automation is the norm in Germany. For a company to stay competitive in Germany, automation seem to be the prerequisite as one would have to keep up with high volumes of production and great quality of the competitors. This explains why Germany has one of the best, quality productions in the world and a high GDP. Volkswagen, Daimler, Siemens, BMW, Adidas, Puma, are some well-known global companies with their headquarters in Germany and I now understand why. Automation has advantages and I've seen this in Germany but I don't think South Africa is ready for that level of automation. For a developing country, SA is fairly automated and produces well. I think in the future,

we could definitely automate more but right now we're still facing a high unemployment rate and to automate production even more would just add to that problem as less people would be needed to do manual work.

The German transport system left a long lasting impression. The trains and busses are so punctual, effective and convenient. For me, the most interesting thing was how they didn't check the bus tickets. They do random checks once in a while, but it looked to me like they operate with a system of trust. The act of buying a ticket is the responsibility of the passenger and if you don't, it'll be in your own conscience. They call it internalised control. I highly doubt a system like that would work in my country. I feel like they do it so that even those who cannot afford a bus ticket are not deprived of mobility, which is commendable. The great transport system in Germany, or specifically in Tübingen makes it a lot more attractive place to live in than a place with high air pollution and traffic levels caused by single occupancy vehicle transport.

I also learnt a lot from the Economics lecture with Professor Dr. Arnt Spandau. He made me realise the potential that South Africa has. We can really be one of the best economies if we position ourselves right.

HULISANI MADZHIE