Contradictory Economic Views

Whilst putting a positive spin on the state of our economy may have short term benefits, ignoring its fundamental flaws is misleading. On September 4 and September 5 two articles on the state of the economy, one in the Mercury the other in Business Report contradicted each other.

In the Mercury on September 4, Dr Petrus de Kock argued that SA’s global reputation was steadily improving. He premised his claim on three criteria: 1] that we have a dynamic and diversified economy; [2] a world-class infrastructure and [3] that FDI inflows have increased.

Unfortunately, de Kock is a tad economical with the facts. The reality is that the economy recorded negative growth of 0,7% in the first quarter, a factor noted in Business Report on September 5 by Woolworths chairman, Simon Susman. Economic growth is forecast to be no more than 0,5% for 2017 with job losses of 76,000. Hardly the dynamic scenario de Kock claims.

As for de Kock’s reference to the world-class infrastructure, yes, in many respects that is correct. However, urban decay is a reality in municipalities, 90% of which are broke. We have an electricity supplier that sputters along shockingly mismanaged. State-owned enterprises that are broke and corrupt. To ignore those realities as de Kock seems to do places a disingenuous spin on prospects. He also ignores the political shambles that prevails in governing circles, a factor the Woolworths chairman rightly and roundly condemned (September 5) as fundamental to what ails South Africa.

In crowing about foreign direct investment (FDI), de Kock is also short on perspective. While South Africa’s FDI share did improve by 31% to $2,36 billion, that sum is below previous levels. The bulk of Africa’sdeclining share of FDI, according to UNCTAD, went to Egypt, Nigeria, Angola, Ethiopia and Ghana.

Whereas China’s leader talks about trade liberalisation, his philosophy is ignored by the Zuma regime which continues to impose restrictive labour practices and prioritises race and demographic ideology as business fundamentals – further aspects of reality that de Kock ignores and which are unlikely to improve future FDI.

Sent into The Mercury and published, 6 September 2017.

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