The Great South African Bank Rip-Off

When I returned to South Africa after living abroad for 9 years, I was surprised to find how far the quality of service at Nedbank, a bank I've dealt with for 30 years, has slipped. Here's a small fraction of the problems I've had, all leavened with being asked "to whom do I have the pleasure of speaking?" every time I've contacted the call centre.

For a start, my cheque account was a on a low monthly charge, high transaction fee structure, which was suitable when I had a low number of transactions on it. This I could change, but the change only took effect in the next billing cycle. In the meantime, I was waiting for a credit card, and used my cheque account card for shopping, and incurred transaction fees at a rapid rate. Had I opened a new account, the new transaction fee would have applied immediately. Why should it cost me more as an existing customer than a new customer who walked in the door?

Then there's the credit card. For a start, I was treated as a new customer with no credit history on setting the credit limit, and told this could only be reviewed in 6 months. That set me up for feeling positive about a 30-year relationship.

Then I had a failed transaction on my cheque account. The merchant tried the transaction three times, then I gave up and paid cash. This showed up as three purchases and three reversals with six transaction fees. I am still waiting for those to be reversed more than a month later.

The one that really took the cake was when I bought some prepaid air time for a couple of cell phones, using my credit card on the bank web site. All three transactions incurred an "SST transfer fee". In Nedbank terminology, "SST" means self-service terminal, the machines they have in branches, so this immediately looked odd to me because I did an internet banking transaction. What's more, for a purchase, no transaction fees should apply. After complaining several times, these were reversed, no reason given. I have not since bought air time on the web site, as I was unsure if the reason for the problem was resolved. When my statement showed up, I was charged 73c for finance charges, despite paying before the due date. Another round of calls to the call centre (actually, several call centres: I tried the complaints department, who said I should talk to the card division, who referred me to the SAA Voyager card division: by this time, I was thoroughly sick of "to whom do I have the pleasure of speaking?").

It turns out that Nedbank regards any transaction on internet banking as a cash transfer. Please check this screen grab out. Does this or does this not include the word "purchase" in more than one place? How am I supposed to know that in Nedbank's world, this is not a purchase but a cash transfer? And why would any sane person, knowing that a cash withdrawal from a credit card incurs interest, make such a withdrawal to buy something that you can buy using a standard credit card transaction (the other meaning of "purchase") at thousands of locations around the country?

I think I made the point to them that I was sufficiently fed up that they should refund the 73c as well, but they ended with telling me this is the last time. Yes. It's also the last time I buy air time online from them, and if they really want last times, I'll be shopping for another credit card.

I do not phone a bank call centre because I want to make a new friend. I call them to solve a problem. Substituting fake politeness for competence is not a win. Get the same fake politeness a dozen times without useful effect, and you feel like throwing up when you get it again.

The Angry African Response to Libyan Liberation

A group of 200 "prominent" South Africans have signed a letter objecting to the turn of events in Libya. This letter, titled "Libya, Africa And the New World Order - An Open Letter from Prominent Africans", is the most detailed apologia yet for the AU's position that there should be no outside intervention and only a "political" solution in Libya is acceptable

It's worth examining some of the claims in detail.

Our action to issue this letter is inspired by our desire, not to take sides, but to protect the sovereignty of Libya and the right of the Libyan people to choose their leaders and determine their own destiny.

Questionable. Failing to address the very real problems of the Gaddafi regime -- its total suppression of civil society, its lack of popular legitimacy and the extravagant lifestyle of the ruling elite who treated the country as a personal fiefdom -- is taking sides.

Libya is an African country.

That's clear. But it's also part of the Arab world, and the Arab League recognised this for what it was early on: a popular uprising being suppressed with brutal force.

When the UN Security Council adopted its Resolution 1973, it was aware of the AU decision which had been announced seven days earlier.

By deciding to ignore this fact, the Security Council further and consciously contributed to the subversion of international law as well as undermining the legitimacy of the UN in the eyes of the African people.

Or maybe the AU undermined its own legitimacy by failing to come up with an effective strategy. When this was all happening people were dying in large numbers, and there was absolutely no evidence that the regime was open to compromise. On the contrary, it repeatedly announced ceasefires and immediately violated them.

The Security Council allowed itself to be informed by what the International Crisis Group (ICG) in its June 6, 2011 Report on Libya characterises as the "more sensational reports that the regime was using its air force to slaughter demonstrators".

The letter writers conveniently ignore the next sentences in this report:

That said, the repression was real enough, and its brutality shocked even Libyans. It may also have backfired, prompting a growing number of people to take to the streets.

The ICG, while playing down some extreme claims of the violence against protesters, makes it clear that the Gaddafi regime was given to extreme brutality, totally suppressed civil society 

It [the UN] then proceeded to 'outsource' or 'sub-contract' the implementation of its resolutions to NATO, mandating this military alliance to act as a 'coalition of the willing'.

First, this kind of delegation is not without precedent. Much the same thing happened in Bosnia. Second, inserting the words "coalition of the willing" is a not-so-subtle attempt at invoking the memory of Iraq. The letter writers cannot directly make that connection of course because that would be dishonest, so why do so in a backhanded way? The Iraq war was was not authorised by the UN, and was launched on a pretext that turned out to be a lie.

Duly permitted by the Security Council, the two 'coalitions of the willing', NATO and the 'Contact Group', have effectively and practically rewritten Resolution 1973.

Since this is a Security Council resolution, why is it so offensive if the Security Council "permits" further steps to implement it? How does this square with the claim that the NATO action is not compliant with the resolution? Are we to assume that the major world powers on the Security Council, including Russia and China, are all dupes of the West?

The actions of its 'sub-contractors', NATO and the 'Contact Group', have positioned the UN as a partisan belligerent in the Libyan conflict, rather than a committed but neutral peacemaker standing equidistant from the Libyan armed factions.

When one of the parties in a conflict is in clear violation of international law and human rights, why should they expect equal treatment?

The George W. Bush war against Iraq began on March 20, 2003.

The following day, March 21, the UK newspaper, The Guardian, published an abbreviated article by the prominent US neo-conservative, Richard Perle, entitled "Thank God for the death of the UN".

Aha. The Iraq connection. But of course this happily ignores the fact that in Libya, the UN did mandate intervention.

Contrary to the provisions of the UN Charter, the UN Security Council authorised and has permitted the destruction and anarchy which has descended on the Libyan people.

Let's see now. The second point of the Preamble to the UN Charter says:

to reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and ...

How often has the UN failed to deliver on the "human rights" promise embedded in the charter? And that is where I take strong exception to the AU position. South African liberation movements, most notably the ANC, overturned the long-held position of non-interference in internal affairs of another country when human rights are violated. That reading of the UN Charter is not a popular one among world leaders, especially despots but also including those who have reason to truck with despots. South Africans should be at the forefront of promoting human rights-based foreign policy, yet "leading" South Africans are at the forefront of insisting on even-handed treatment of a military dictator.


Have we forgotten our own history so soon?

And then there are the issues quietly ignored in the letter. The defections of Libyan diplomats, some quite early in the uprising when it was by no means clear. The consistent message from Al Jazeera reporting, a news organisation that favours reform but cannot be called stooges of the West, that this was a genuine grass-roots uprising, met with brutal force. The recognition of the new ruling body by much of the rest of the world. And finally, we mustn't ignore the fact that the Libyan government had at its disposal the option to accept the AU roadmap unilaterally and implement a ceasefire when the opposition was weak. They didn't. And now they are history.


The real lesson in all this is that learning from history requires that you understand all of it, not just the bits you like, or that support your case. That this open letter campaign was led by a senior academic does him and his university no credit. If Africa is to rise from its current trashed position, we need leaders who engage with and understand the wider world, not inward-looking leaders who are threatened by any external challenge. And the old Pan-Africanist mindset where anything African was to be defended at all costs does no one but our enemies any good, because defending the indefensible does not build strength. It builds weakness.

Libya: is the AU relevant?

Back in March, I wrote about how the Arab world was seeking a new modernity. The African Union, it seems is not.

While the Arab league was fairly quick to expel Libya, the AU treated the conflict in Libya as if it was a political dispute to which there was a political solution. I followed events on the Al Jazeera web site as well as twitter in the early weeks of the revolution and these unfiltered sources made it clear that this was a genuine grassroots uprising. What's more a major driving force in the continuation of the uprising was the certain knowledge that to be identified as a "rebel" in the Gaddafi world view, where everyone loved him, was to set yourself up to be killed.

Let's be clear on how this thing started. In line with the broader "Arab Spring" movement, peaceful protests broke out in Libya, and the regime responded by shooting at protesters with heavy calibre weapons. Once it became clear that things would not die down despite this, talk escalated to exterminating all rebels, and Gaddafi deployed tanks to shoot at civilians. In the early days of the conflict, the opposition was vastly outgunned, and the courage to face such odds is rare. I remember talking to someone at this stage whose view was that anyone prepared to machine-gun crowds couldn't be overthrown, and these people were not stopping at machine guns. They were firing anti-aircraft guns into crowds, and shelling residential districts.

I've been listening to various "experts" pontificating on the matter on South African talk shows and many come from the starting point that the AU had the right approach and the NATO intervention was excessive and unjustified. But look at the AU's track record. Zimbabwe and Kenya both had disputed elections. Rather than insist on correcting the results, both countries had solutions imposed on them that rewarded electoral fraud.

In South Africa, in particular, many in leadership view Gaddafi with affection because he supported liberation when western powers saw the apartheid South Africa as a "good" authoritarian regime, stopping the advance of communism. That the major liberation movement, the African National Congress (ANC), was a largely social democratic alliance (with a small communist membership) that at the time saw the British Labour Party as its role model was hardly indicative of communist tendencies, but such was the global politics of the time. Either you were in the communist camp or your weren't. The Cold War is now over, and such neat divides no longer apply. The Soviet Union, far from a utopian example of "scientific socialism" today is understood to be a corrupt state favouring a small elite, using harsh police state practices to suppress opposition. The West, on the other hand, far from promoting democratic values, has a long history of promoting authoritarian regimes.

In this post-Cold-War era, we need to abandon ideological preconception and see things for what they are.

Gaddafi was a bloodthirsty military dictator, who wrapped himself in a cloak of Africanist liberation rhetoric. The AU, by attempting to prolong his rule, has shown itself to be a creature of a bygone era. NATO, on the other hand, has intervened in a relatively principled way, doing the minimum to give the revolution the upper hand. Whether the end result is a truly free country remains to be seen, but comparing this with Iraq, where the UK, US and a rag-tag coalition went in on the basis of a lie is ridiculous. Rather than question why Libya, I question why not Barhain as well? Had the vicious suppression of that uprising been stopped too, what are the chances that the hesitant steps to reform in Syria, preceding the ongoing vicious crackdown, would have continued?

The ANC radically transformed the whole space of foreign policy by tearing down the notion that national sovereignty precluded intervention in the internal affairs of a country by outsiders. The struggle against apartheid did more than anything else to put human rights on the global agenda. Why, then, is the ANC today at the forefront of coddling dictators like Gaddafi and Mugabe in its own foreign policy? I can only see it as misplaced loyalty to old comrades in arms.

The Market Share Bug

Ford did it with the Model-T. VW nearly went broke for the same reason. Is Microsoft heading for trouble by listening to their customers too much?

Not so long ago, I recall reading somewhere that Microsoft was not going emulate Apple's iPad design, because they had consulted their business clients and they all wanted something that looked like Windows.

This all reminds me of how VW battled to break away from selling the Beetle (Bug if you're American) for much the same reason. All their customers said they wanted one (or something much like one); as many as 90% could say that and still lead a company to terminal decline.

This picture is a tad complex but captures the basic problem. Let's assume a company launches a new product in a market with an overall growth of 10% per annum, and it consistently scores a 90% retention rate with clients (the red line): that fraction can be relied on to buy it again. Despite this very consistent figure, market share rises very fast at first, peaks, then goes into slow decline. Growth follows an even more spectacular variability, starting at over 40% the first year of production, shooting up to over 80%, then going into steep decline, steadying at around 5%. They key to understanding all this is the yellow curve, the fraction of the market the product doesn't already have that it takes from the competition. This fraction rises very fast until it levels off at 40% (first arrow, a) for a couple of years, then the competition starts retaining its customers a bit better (second arrow, b), and the rate of converting competitors declines for a couple of years to 20%, where it sticks for a while until the competition comes out with a product with significant new appeal (arrow c), and conversion from the competition enters a steady and terminal decline.

This graph doesn't correspond to a real scenario; plugging in actual market share numbers requires access to stats over a long enough time to do this properly. Nonetheless the basic model applies whenever a company hits a point where it has a very loyal client base and new buyers aren't interested.

Through all this, the company has been maintaining 90% of its loyal clients, yet if this trend continues, they will eventually go out of business. This is what happened with the Beetle (and before it, the Model-T). Increasingly, buyers who had not bought one before saw it as outmoded and uninteresting. Asking the existing client base what they wanted would have resulted in a resounding "more of the same".

This is why Microsoft today asking their clients what they want is to risk oblivion. Ford and VW recovered; will they?