There are lots of ideas about the economy — but no action
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That SA is not short of ideas or plans to revive and grow its moribund economy is clear. There have been any number of economic plans from the government, the private sector and other social partners, and a plethora of experts have offered potential solutions to SA’s problems. But the main problem has been, and remains, a failure to implement.
Business leaders have, on occasion, complained about policy inconsistencies and regulatory uncertainty, pointing out how, for example, government departments appear not to speak to each other, let alone co-ordinate their efforts for the common good. A typical case of the left hand not knowing what the right hand is doing, or plans to do.
President Cyril Ramaphosa has made all the right public noises, talking about the country’s worsening jobless and poverty rate, widening inequality, poor business and investor confidence and rampant corruption. These are well-known issues; the evident malaise manifesting across the economy. Covid-19 has merely brought to the surface what has always been there — the deep social and economic fault lines in SA, one of the most unequal societies in the world.
Economic recovery will only start in 2021, at best, with modest GDP growth of between 2.5% and 3.2%, compared with predictions of a GDP contraction of 8% or more for 2020. Frighteningly, some economists estimate the economy will need three to five years to fully recover and begin to make a dent in chronic unemployment that is currently at a 17-year high and predicted to rise to as much as 35% before the end of the year.
Investor confidence is at a low ebb and was muted even before the lockdown. Investors have one major complaint: the government is good at talking and making the right noises, but woefully dismal when it comes to taking decisive action. The so-called investor strike, with corporates alleged to be sitting on cash and near-cash deposits exceeding R700bn, is a tragedy in a country that is desperate for job-creating investment.
What can be done? The government has to start walking the talk and embracing the economic recovery plan endorsed by major business organisations, such as the Black Business Council and Business for SA. The latter estimates that more than 1-million people could lose their jobs this year alone. That means deepened poverty and inequality, and worsening unemployment, which feed into crime affecting already impoverished households.
To make matters worse, ...
Business leaders have, on occasion, complained about policy inconsistencies and regulatory uncertainty, pointing out how, for example, government departments appear not to speak to each other, let alone co-ordinate their efforts for the common good. A typical case of the left hand not knowing what the right hand is doing, or plans to do.
President Cyril Ramaphosa has made all the right public noises, talking about the country’s worsening jobless and poverty rate, widening inequality, poor business and investor confidence and rampant corruption. These are well-known issues; the evident malaise manifesting across the economy. Covid-19 has merely brought to the surface what has always been there — the deep social and economic fault lines in SA, one of the most unequal societies in the world.
Economic recovery will only start in 2021, at best, with modest GDP growth of between 2.5% and 3.2%, compared with predictions of a GDP contraction of 8% or more for 2020. Frighteningly, some economists estimate the economy will need three to five years to fully recover and begin to make a dent in chronic unemployment that is currently at a 17-year high and predicted to rise to as much as 35% before the end of the year.
Investor confidence is at a low ebb and was muted even before the lockdown. Investors have one major complaint: the government is good at talking and making the right noises, but woefully dismal when it comes to taking decisive action. The so-called investor strike, with corporates alleged to be sitting on cash and near-cash deposits exceeding R700bn, is a tragedy in a country that is desperate for job-creating investment.
What can be done? The government has to start walking the talk and embracing the economic recovery plan endorsed by major business organisations, such as the Black Business Council and Business for SA. The latter estimates that more than 1-million people could lose their jobs this year alone. That means deepened poverty and inequality, and worsening unemployment, which feed into crime affecting already impoverished households.
To make matters worse, ...