Lawyer resists South Africa’s brain drain

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My name is Leon and I am going to London". It may have surprised Leon but all 357 people on board the Heathrow-bound plane from Johannesburg were going to London. Right plane, wrong seat. Leon was going to sit next to me. He filled the chair comfortably. So much so that the occupants on either side of him braced themselves for the battle of the bulge.
Leon is an insolvency lawyer, a partner in a practice
based in Pretoria and - a sad comment on the South African economy - he's having a bumper year. "In good or bad times the buggers will always need us." He boasts about the 10% and 12% fees he picks up, depending on whether he's dealing with a "movable" or an "immovable" - asset, presumably. South Africa is still in a phase of transition, and the few assured winners are lawyers like Leon.
Is Leon the kind of man the leaders of South Africa's banking industry refer to when they agonize about the damaging exodus of talent from South African Inc? Let's hope not. But it's a problem that has many people worried. Some say the brain drain is the single largest threat facing the South African economy, one that will seriously hurt its chances of hitting economic growth targets over the next few years. A recent estimate holds that there is a shortfall of between 350,000 and 500,000 skilled workers. The sectors suVering the greatest dearth are finance and IT.

One fund manager complains: "No sooner do we train guys up, than one of those bloody foreign entities comes in snatches them away and we never get to see them again." A corporate financier from one of the largest local banks says: "South Africa is a great place to live, but when we travel, we're paupers. We can't compete with the salaries that the foreign boys oVer, so we can't keep the talent."
The banking community isn't the only sector complaining about the haemorrhage of talent leaking out of Johannesburg's International Airport's terminal 6, departure gate 3. Doctors, nurses, engineers, teachers journalists are all seeking to sell their skills for a higher wage and a safer life outside the volatile, and crime-ridden leader of sub-Saharan Africa.
Statistics suggest that Johannesburg has one of the highest incidences of murder and rape in the world, yet those that stay are passionate about their country. And Johannesburg, the engine room propelling the economy forward, instills a fierce loyalty into its workers. Admittedly they sit in their high security office blocks, but they're passionate all the same. A foreign banker who has gone against the Xow and moved down to Johannesburg talks fondly of how laid back it is and what a great life style he leads. With no sense of irony, he relays his car-jacking anecdote from the previous year. "I do have a gun. But there were four of them, and I'm no Clint Eastwood".
One banking analyst for a securities house describes skilled people in the same vein as investment flows. Where would people rather live and where would corporates and governments rather invest, he asks, "in a country with low political risk, low levels of violent crime, high GDP, low inflation, a stable and strong currency," - pause - "or South Africa?"
It may be a harsh sketch of this ambitious emerging market, but South Africa has reached a social and economic juncture. Africa's GDP as a whole stands at around $376 billion, of which South Africa contributes $133 billion. Yet its attempts to differentiate itself from other states on the continent are proving problematic. Violence in Zimbabwe has definitely spooked foreign investors. Perception and reality are often confused and comparisons have carelessly been made.
And economic hopes in South Africa continue to decline. The rand maintains its downward spiral, decreasing 15% against the dollar in the last year. Inflation is on an upward trend, while unemployment is estimated to be in the range of 30% to 38%.
There is however some light. Despite the Johannesburg Stock Exchange falling further this year than the Dow, locally listed companies are still looking to post growth in the region of 20%, and the hope remains that interest rates will be maintained at the present levels.
The skilled that do stay evoke a commendable team spirit, working for the same aim of lifting South Africa onto the radar screen of the international financial markets. Trevor Manuel, the finance minister, and Tito Mboweni the governor of the South African Reserve Bank, both command respect and confidence from the business and banking sectors. Both will be called upon to lead South Africa through this testing period.
This respect however now faces a test, with a hostile banking takeover that has the South African financial community enthralled. Nedcor has embarked on a hostile takeover bid for its larger rival Stanbic. A banker involved in the deal describes it as a "huge bun fight with egg waiting to drip onto many faces". It was first placed before the Competition Board and the banking regulator, and from there the affair proceeded to the courts. This can of worms now lies in front of Trevor Manuel, daring him to open it. He has to decide the direction South African banking is going to take. Whatever he decides in the biggest hostile bid in South Africa's corporate history, he will lose admirers.
Still if you are an insolvency lawyer having a bumper year, or a visitor looking for a break from the humdrum, Leon swears that South Africa is the place to be. At weekends, Leon likes nothing better than to "blast animals up the arse for a few thousand rand." According to Leon for R5000 ($700) you can bag up to six animals, "and that really impresses your clients". Though Leon adds:"I never kill more than I can eat."
And such attractions are a money-spinner. "The Americans, generally the bloody rich, are charged more. They bring their bloody sophisticated guns but can't use them. I remember this bloody banker from New York who was such a bad shot we had to go drugging all the game just so he hit something. In the end he shot a warthog that had bloody passed out."
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