We need stimulus and urgency

2013-05-26 14:00

The decline of the rand’s exchange rate, which reflects how the rest of the world views South Africa’s sociopolitical environment and its economy, is generally downplayed, if not pooh-poohed, by many of our leaders as the upshot of “ill-informed perception”.

The rand’s recent decline, however, elicited a more realistic – albeit lax – response. This week, Finance Minister Pravin Gordhan and Reserve Bank Governor Gill Marcus delivered some sobering thoughts on the state of the economy and the threats to its growth.

President Jacob Zuma echoed some of their concerns, warning unions that they should not “wreck” the economy with unrealistic wage demands, although he could not resist adding his common refrain that international investors rely on perception rather than fact.

This is not really true.

The facts are stacking up.

Economic growth is pedestrian and way behind other countries, notably our African neighbours and Brics partners.

Manufacturing output is under severe pressure, our already unacceptable unemployment rate is rising, and labour unrest is crippling critical industries.

Our bloated public service is inefficient.

The fallout from our economic woes is not only reflected in ratings downgrades, it is written on the faces of beggars at every street corner.

The concerns raised this week are not new, but it is encouraging that red flags have been raised at the highest level.

What is of concern is the lack of evidence that they are looking for solutions.

We have the correct policies in place, but they are not helping to stop the noose from tightening around the economy.

Gordhan asked for “spectacular leadership” from companies, government and unions, and followed it up by meeting with Mineral Resources Minister Susan Shabangu and mining bosses on Friday.

His request, given what has happened since Marikana, is optimistic.

What we require is stimulus, urgency and change; and these cannot happen without real intervention by all stakeholders working together with a common cause. It’s a tough ask.

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