ROGER BAXTER: Tough choices required to get SA on road to growth
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The economic recovery strategy published in July by Business For SA (B4SA), aimed at achieving high levels of inclusive economic growth to recover from the Covid-19 crisis and the economic crisis that preceded it, must form the basis for any recovery plan.
SA’s pre-Covid economy was marked by declining international competitiveness, a collapse in business and investor confidence, low levels of economic growth, rising unemployment and accelerating poverty. The pandemic has pushed SA deeper into trouble, with at least another 1-million formal-sector jobs lost, an 8% decline in GDP likely in 2020, and burgeoning public debt that is likely to exceed 100% of GDP in a couple of years.
As in the 1990s, SA again faces a stark high vs low road set of choices. The latter will be achieved through continuing investor-unfriendly policies and will lead to a sovereign debt default crisis where everyone suffers significant economic and social pain.
The alternative will require the country’s leaders to adopt and implement a significant pro-competitiveness structural and institutional reform agenda based on tough choices, leading to the country realising its true economic and transformational potential.
On the high road, the country improves its competitiveness rankings towards the top quartile, investment rises to above 25% of GDP, and the economy grows by at least 3% per annum. Unemployment halves, many of the income inequality and poverty metrics are drastically improved, and the transformation of the economy becomes sustainable. Every citizen wins in this scenario.
B4SA has identified as priorities the following: the critical need to improve the country’s competitiveness and ease of doing business rankings; urgent steps to improve business and investor confidence; significant structural and institutional reforms; policy consistency; regulatory reform; addressing crime and corruption; infrastructure investment; state-owned entity (SOE) restructuring, optimisation or exit; an energy industrialisation strategy; economic transformation and supporting BEE; addressing skills shortages; and investing for modernisation. Each of these is critical for the recovery, sustainability and growth of the overall economy and mining industry.
The Minerals Council has identified eight areas that need to be urgently addressed if a recovery in the mining industry is to occur and output and jobs are to be saved and expanded in the next four years. Some are mostly the responsibility of the government; others require initiative from the industry. Most importantly, almost every aspect requires the collaborative efforts of the government and business, together with labour and other stakeholders, ...
SA’s pre-Covid economy was marked by declining international competitiveness, a collapse in business and investor confidence, low levels of economic growth, rising unemployment and accelerating poverty. The pandemic has pushed SA deeper into trouble, with at least another 1-million formal-sector jobs lost, an 8% decline in GDP likely in 2020, and burgeoning public debt that is likely to exceed 100% of GDP in a couple of years.
As in the 1990s, SA again faces a stark high vs low road set of choices. The latter will be achieved through continuing investor-unfriendly policies and will lead to a sovereign debt default crisis where everyone suffers significant economic and social pain.
The alternative will require the country’s leaders to adopt and implement a significant pro-competitiveness structural and institutional reform agenda based on tough choices, leading to the country realising its true economic and transformational potential.
On the high road, the country improves its competitiveness rankings towards the top quartile, investment rises to above 25% of GDP, and the economy grows by at least 3% per annum. Unemployment halves, many of the income inequality and poverty metrics are drastically improved, and the transformation of the economy becomes sustainable. Every citizen wins in this scenario.
B4SA has identified as priorities the following: the critical need to improve the country’s competitiveness and ease of doing business rankings; urgent steps to improve business and investor confidence; significant structural and institutional reforms; policy consistency; regulatory reform; addressing crime and corruption; infrastructure investment; state-owned entity (SOE) restructuring, optimisation or exit; an energy industrialisation strategy; economic transformation and supporting BEE; addressing skills shortages; and investing for modernisation. Each of these is critical for the recovery, sustainability and growth of the overall economy and mining industry.
The Minerals Council has identified eight areas that need to be urgently addressed if a recovery in the mining industry is to occur and output and jobs are to be saved and expanded in the next four years. Some are mostly the responsibility of the government; others require initiative from the industry. Most importantly, almost every aspect requires the collaborative efforts of the government and business, together with labour and other stakeholders, ...
