I do not claim to be a financial wizard, in fact I have never worked in the financial sector. So let me be clear from the start, that this is no blog for financial gurus and the like. I am a political animal and read everything from history to newspapers to internet. The people I am talking to today are those who do not read the business section of the newspaper and there are a lot of those.
Fitch and Moody's have downgraded South Africa's investment grade rating a notch from BBB+ to BBB, a notch closer to JUNK. The reasons for this downgrading are, decline in competitiveness, deterioration of public finances (i.e. corruption), social and political tensions, 25.5% unemployment. I can hear some of you saying, that SA has alway had financial ups and downs and anyway, you have got your football, your cricket your rugby and your beer, so what the heck.
Well, there is news for you buster, all this does or will touch your life. From now on, every time the government borrows money from abroad, the interest rates will be higher and the government will have to raise taxes to repay the money. Having to pay more taxes will put a brake on trying to start a new business and companies will do less hiring as they try to stabilize their costs. So it goes without saying unemployment will rise and when unemployments rises, crime rises and and social unrest increases.Investors will not be bringing their money here in the face of massive corruption and social unrest.
One has only to look at the farm workers strike. The going minimum wage on the farms was set by the ANC minister of labour, Mildred Olifant at just below R70 per day. (Who can live on R70 per day?) When all hell broke loose, where was Madame Olifant, well .....................overseas somewhere at a conference. Madame Olifant was for a while represented by the Minister of Fishing and Agriculture, who-toied with the workers, assured them that they would not have to come up for broken and damaged property and then disappeared.
Time old adages like, "A crisis takes precedence over all else" or "A stitch in time saves nine" are a mystery to Madame Olifant, who never rushed home to build some sort of firewall. Marikana was no different, only the players were different.
I recently read a blog of a young man who had emigrated to Australia, had trouble putting down roots and getting connected and returned to SA. As the troubles here mount, he is reconsidering returning to Australia. If he were to leave again I would wish him well. If I were a young person, I might do the same.
I do not want to preach to the converted, which many people using this blogging space are. The people I am trying to reach out to, are those who are who are seeing all these unhappy happenings in SA and are standing on the brink of political decision. Hey man............... its not cool to be stupid, look carefully before you put your cross.
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