Alarm bells

2008-05-30 00:00

When national economic growth touches a six-year low, declining from one quarter to the next by 60%, alarm bells begin to ring. Their clamour becomes more insistent when it is linked to double-digit inflation in a violence-prone society plagued by severe poverty.

South Africa is not alone. A world-wide economic slowdown is a consequence of a number of factors, including reckless lending practices in developed countries. But for an economy that remains significantly resource-based, declining mining output and the sector’s worst performance in over 40 years are bad news.

This leads straight back to local issues, most notably government policy and managerial competence in parastatals. One of the reasons for economic sluggishness is uncertain energy supply with Eskom still unable to provide all the electricity required by the mining industry. Colour-coded warnings broadcast on television screens may be irritating, but they carry a serious message the nation ignores at its peril.

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