Welcome though they may be, it would be a mistake to read the newly released quarterly growth figures as indicating a turnaround. Growth for the year is likely to remain anaemic, coming in at well under 2% at best, and quite possibly under 1%.
The reality is that SA faces enormous challenges to its prosperity, many of which are self-inflicted. Leave aside for the moment such deeply entrenched problems as the country’s poor educational outcomes and its inefficient and politicised public service. It is breathtaking that a country with unemployment at 29% has introduced a national minimum wage and threatens tougher action to police the racial profile of workplaces. Or that, as SA peers into a fiscal black hole, its government promises an unaffordable national health insurance scheme and dismisses concerns about its costs.
Most concerning is that a country desperate to attract investment has placed the downgrading of property rights at the centre of its policy agenda. This is the drive of the governing party and government to introduce a policy of expropriation without compensation and to go after savings and pensions through prescribed assets.
The economic consequences of these will be as damaging as they are predictable. A meaningful turnaround will hinge on the choices SA makes — a necessary start being to discard the bad ones its leadership has committed the country to.
Terence Corrigan
Institute of Race Relations
