More chiefs, but where’s the service delivery?

I was given a little booklet by Statistics South Africa entitled Stats in Brief 2009, and a very useful little document is is too. Hardly bigger than a Kindle screen, it contains in its 200-odd pages a wealth of statistical data on South Africa, from economic statistics to tourism figures. All the data in this little book is also available on Statistics South Africa’s website, but the book format, with its ease of moving between pages/sets of data, somehow enables you to make connections that are much more difficult to detect while navigating the web. For journalists, it is a veritable treasure trove of potential stories.

For example:  on Page 64, you’ll find that there has been no virtually no job growth in the Eastern Cape province over the past nine years. Turn the page, and you’ll notice that there has been about 47% growth in one particular job category: legislators, senior officials and managers. Mmm. Thumb through to the section on municipal expenditure and – my, oh my – the Eastern Cape province spends more on municipal councillors’ remuneration than any other province save KwaZulu-Natal, which has about a third more people. In percentage terms, the Eastern Cape muncipalities devoted 4.4% of their expenditure to councillors’ salaries in 2008, compared with a mere 0.8% in Gauteng, and up from 2.8% in 2001. Now if service delivery only improved at a similar rate…

Kudos to Stats SA for making this sort of informaiton available in such a user-friendly format.

NYT’s Norris transforms humdrum market story

What a great example of financial writing from the New York Times’ Floyd Norris, who lifts the normally humdrum market story to new heights:

Combine one part nervous traders, one part Greek crisis and one part trader error. Stir in one part central bank complacency. Bring to boil. Panic.

Read the full story here.

What’s with Business Day and the “internet thing”?

Business Day is a great newspaper and a must-read for me every day. Strong on news, great on opinion and analysis – but boy, when is it going to move into the digital age?

More than three months ago, editor Peter Bruce announced the newspaper’s new online strategy. But nothing has changed: the website remains a mess. Still having Monday’s column by your editor as the headline piece on your opinion and analysis page on Friday is no good. And if you are going to blog, then the least you should do is post from time to time. After promising readers a daily blog, Bruce last posted on December 13, and some other staff writers seemed to have thrown in the towel after just one attempt. What’s more, there is no information about the writers on their blogs, and the blogs are in now way mainstreamed as part of the newspaper’s offering to readers. It is as if someone decided to tack on staff blogs, and then forgot about them. Shoddy.

Business journalism in English

One of President Obama’s proposed bank reforms is aimed at  ensuring “that no bank shall (conduct) proprietary trading operations unrelated to serving customers for its own profit.” How many newspaper readers/Twitter followers/television viewers/etc would know what that means?

Here’s Daniel Gross of Slate’s paraphrase:

“In English: No federally backed bank will be allowed to use other people’s money to take big risks, reap most of the rewards, and suffer minimal consequences if the investments fail.”

Funny how things suddenly make so much sense if you say them in plain English.

Is this Business Day’s best?

In my previous post, I said that Business Day “regurgitated” Anglo American’s statement on the company’s far-reaching restructuring, which included axing two senior South African executives. Turns out I was being charitable to Business Day. The story on Business Day Online was in fact the statement from Anglo American, verbatim. The “story” was still on the website at 11:30pm.

In the meantime, competitors such as Fin24.com and Bloomberg News have killed the story. There will be nothing left for Business Day’s print edition tomorrow.

If this is the best Business Day, South Africa’s premier business daily,  could do on a story of great importance for South Africa, the newspaper has to start thinking seriously about its online presence.

Good and bad business journalism about the Anglo American restructuring

Anglo American’s restructuring provided examples what business journalism should and shouldn’t be. Business Day’s online coverage simply regurgitates the press release, while Bloomberg News provides context, explains why the restructuring is taking place, and explores the implications – including the dimsissal of two senior South African executives.

Business Day’s lead:

Anglo American has announced a number of changes across its businesses to create a more streamlined management structure and further focus the Group on its core mining portfolio.

Seven commodity business units are being created, with management teams located in the area of core geographic focus for the business unit and responsible for operational performance and project delivery. These are (etc., etc.,you get the picture….)

That is simply not good enough if Business Day wants to compete in the digital age.

Here’s how Bloomberg played the story:

Anglo American PLC said Thursday it plans to sell off a handful of businesses, oust three top managers and reorganize its management structure as the mining giant looks to focus on a core portfolio of commodities.

The announcement comes a week after rival Xstrata PLC walked away from a proposed merger of the two companies and amid continuing speculation the miner will renew its offer if shareholders think Anglo American is underperforming.

(…)

Anglo American also said Thursday it would reorganize and eliminate a layer of management, moves that will cost Philip Baum, CEO of Anglo Ferrous Metals; Ian Cockerill, head of Anglo Coal; and Russell King, chief strategy officer, their jobs.

The restructuring is a big story for South Africa. Although based in London these days, Anglo remains the granddaddy of South African companies, one of the biggest listed on the JSE and one of the country’s largest private-sector employers. Why, then, did our most important local business publication miss the real story, which is the dismissal of the South African management team?

Both Business Day Online and Bloomberg News were working to tight deadlines, so lack of time can’t be an excuse.

(Disclosure: I worked for Bloomberg as a South African correspondent from 2000 to 2004.)

PS. Fin24.com also got it spot-on:

ANGLO American, the R373bn mining business which recently survived a merger attempt by rival Xstrata, is slashing layers of management in a bid to drive costs down and streamline the business. It has also set out plans to divest from assets deemed non-core.

 Among the management casualties are Ian Cockerill, the former Gold Fields chief executive who more recently headed up Anglo’s coal division, and Philip Baum, the acting chief executive of the South African business. Russell King is also leaving the company.

Fin24.com’s  coverage actually was better in some ways than Bloomberg’s, in that it confirmed that Baum and Cockerill were leaving the company and not just being shoved sideways. But Fin24.com got Baum’s position wrong: he was (until today) chief executive of Anglo American Ferrous Metals. His portfolio is being sold off (Scaw Metals) and divvied up between others (the SA and Brazilian iron ore operations).

Teaching economics journalism: Why? What? Who for?

 

(Paper presented at “Journalism Education and Training: the Challenges”. Conference, Department of Journalism, 16 – 18 October 2008, Stellenbosch, South Africa)

Abstract

A recent survey of South African business editors revealed a need for specialist training of business journalists (Rumney 2008). But editors held widely differing views about the focus and form of training, while none offered a coherent vision for the further education and training of their staff. This raises important questions about the relationship between educational institutions offering economics journalism courses and the business media. What do we teach? Whose interests do we serve? An approach which simply attempts to replicate current practice runs the risk of turning economics journalism education into a commodity, with the business media as the consumer. What about the interests of society, and of the educational institution itself? This paper argues for an approach that attempts to produce reflexive journalists who are able to practice their craft, but also to question and challenge accepted practices and procedures and reflect on the role and effects of their work. It sees journalism teaching as a form of social intervention that has the potential to change the way journalism is practiced. The challenge is to design a curriculum that not only straddles the theory/practice divide, a common challenge in journalism education, but that also accommodates the imperative simultaneously to teach and to question prevailing practice.

Introduction

The turmoil in financial markets over the past five weeks has focused attention on economics journalism[2] as never before. The credit crisis, bank failures, government bail-outs, stock market crashes and the deepening global recession have played themselves out day after day, relentlessly, on television, in newspapers, on the radio, in the blogosphere and on the internet – and not only in specialist financial or business media, but in mainstream news bulletins, current affairs programmes and newspapers.

Who is to blame for the Eskom fiasco? Not just the current management, it seems

Great analysis from Fin24.com’s Jan de Lange on Eskom’s R9.5 billion “embedded derivatives” loss. Everyone’s pointing fingers at Jacob Moroga and the current management team, but these losses are the result of 25-year contracts concluded as far back as 1995… fingers should be pointing at then Eskom CEO Allen Morgan and Brian Gilbertson, his counterpart at Gencor (and later BHP Billiton, the company that is now reaping the rewards of those contracts).

The business of business news: South Africa’s financial press and the political process

The business of business news: South Africa’s financial press and the political process[1]

(Paper presented at the annual conference of the International Association for Media and Communication Research, Mexico City, July 2009)

Robert Brand

Abstract

This paper explores the historical development of the financial press in South Africa, and theorises the role played by the financial news media in the political process, with particular reference to the development of economic policy. Using a new institutional approach, it traces the origins and development of the financial press from the early 19^th century to 1996, when the ruling ANC adopted the Growth, Employment and Redistribution (Gear) strategy as its economic policy, a decisive moment in South Africa’s economic policy development. Focusing on the Financial Mail, South Africa’s first financial newspaper, as a case study, the paper argues that the financial media could be seen as an institution in the economic and political sphere, and that such a view aids an understanding of the political role of the financial media.

 Introduction 

What is the role of the financial media in society? Are they simply providers of information for the business and investment sectors, or do they also have a broader political role? These questions have become especially pertinent in the light of debates about the role of the financial media in the financial crisis which lead to the current global recession.

This paper explores the function of the financial media[2] both in the economic and the political sphere in South Africa. Such an exploration requires a historical approach, examining the development of these organisations and their practices over time within a changing economic and political context. Ryfe (2001, 2006) has linked historical research in political communication with the “new institutional” approach, which arose as a reaction to the behaviourist paradigm in economics, political science and sociology, and which helps us to understand how institutions, structures and processes interact and change over time. Cook (1998) and Sparrow (1999) apply this approach to the news media, equating news routines and practices to “institutions” in the sociological sense. They argue that the news media should be seen not as a collection of distinct organisations, but as an institution which not only constrains, but enables the production of news (Cook 1998: 15). Building on the work of Cook and Sparrow, this paper argues that the financial media could be seen as an institution; and that the financial media are more than an economic institution: through their influence on the opinions of elites, including policy makers, they play a crucial role in articulating a particular economic ideology and persuading governing elites to adopt this ideology in the policy-making process. The financial media could therefore also be said to be a political institution.

Zimbabwe’s inflation rate: fact or fiction?

A story by the news agency AFP would have us know that Zimbabwe’s inflation rate six months ago was estimated to be “in multiples of billions”.

Now I know that things in Zimbabwe are bad … but that bad? Or is this just another case of a journlalist who doesn’t understand numbers? An annual inflation rate of a billion percent means that if your wad of money – let’s say, a million Zimbabwean dollars – can buy a loaf of brad today, it will only be able to buy one-billionth of that loaf in a year’s time. A billionth of a loaf of bread is a very, very small particle; conversely, a billion is a very, very large number. In fact, so large, that it becomes meaningless when you are talking about a measurable indicator such as inflation.

The Zimbabwean central bank recognised that when it stopped calculating its inflation rate at the end of last year. At that time, the official inflation rate was 14 841%, which already signified hyperinflation of an unprecedented scale. Since then, credible estimates of Zimbabwe’s inflation rate have ranged from 40 million percent (economist John Robertson) to 231 million percent (Zimbabwe’s Central Office of Statistics). So where does AFP get its “multiples of billions” from?

In February, The Times of South Africa reported that economist Steve Hanks of Johns Hopkins University had calculated Zimbabwe’s inflation rate at 89.7 sextillion percent. In his blog on the same day, editor Ray Harltey put the figure at between 5 sextillion (that is, 5 followed by 21 zeros) and 80 sextillion. He pointed out that this was “academic” (I think he meant statistically meaningless) because the currency had, for all intents and purposes, become valueless.

But if those sort of figures are meaningless, then why publish them? And, being the estimate of one economist, how credible are they? Gary Els, vice-president of the Astronimical Society of South Africa, answered that question much better than I can in a response to Hartley’s Blog:

I was definitely astonished to see the figure shoanswerwn of Zimbabwe’s inflation rate on the front page of The Times newspaper today. A figure of 5 followed 21 zeros percent!

In scientific terms we say 5 x 10 to the power of 21, now that is truly a very large number. To give you an idea of just how large it is, the estimate for how many stars there are in the entire universe is 9 x 10 to the power of 21 or 9 billion trillion stars !

So almost a star in the universe for every percent inflation of the poor Zim dollar.

Now if you take a Zim dollar note which is 0.1mm thick, and place another 9 notes on top, you get a pile of notes 1 mm in height. Thus 10 000 notes will be a pile 1 meter in height.

Thus for this inflation rate, or to purchase the same item as in the past with the same denomination, you would require a pile of notes 5 x 10 to power 14, kilometers in height, which is a pile of notes from earth to beyond the edge of our Solar System !!

The space probe Voyager 1 which was launched by NASA in 1977 to explore the solar system, is traveling at 61 000km/h and is currently, only now near our farthest planet Pluto`s orbit, would only get to the end of the poor Zim dollar pile of notes in 2025 !

Also a bank note weighs 1 ounce or 23 grams, and so the poor Zimbabwean would require the inflated same denomination notes in tons of 1 x 10 to the power of 17, which about 85 percent of the earths weight in tons !

Now that is more than astonishing as your headlines say, it is a number just to large to believe.