The makings of a winning nation
At the recent annual meeting of the International Monetary Fund (IMF) and World Bank, economists from around the globe expressed concern about South Africa’s unstable economy, saying we can expect more economic turmoil next year.
While this came as no surprise as economic turbulence is one of the challenges, not only SA, but the rest of the world will continue to face in the coming years, SA's 2% growth registered this year is highly undesirable. So is the IMF's projected growth of 2.9% for the country next year.
SA lags behind
According to Gadfly New York University Professor Nouriel Roubini, SA is in a very fragile and uncompetitive economic position "given the country's twin deficits and political problems.”
In IMF's semi-annual World Economic Outlook report, SA came dead last to Ghana, Cameroon, Botswana, Senegal and the Ivory Coast. And this group as a whole is expected to register 3.3% growth this year, with an economic growth rate of 3.9% in 2014.
To enhance overall economic competitiveness in troubled times, Roubini commented that countries like us would need to focus on reducing fiscal and current account deficits. "They also need to ensure that market and business-friendly structures are introduced,” he said.
Interestingly enough, these are the exact two components that SA has been struggling with over the past few years.
Findings published by the Global Entrepreneurs Monitor (GEM) group over the years continually placed SA at the bottom of the scoreboard in comparison with other emerging countries as far as entrepreneurial spirit is concerned. This is alarming as entrepreneurs are vital for job creation, increased productivity and economic activity.
We have furthermore not succeeded in establishing and promoting a vibrant small business sector to date, as most policies lack efficiency and implementation fail.
Turning the ship around
"To further enhance the economy, SA would need to address some weaknesses such as being rated 113th in labour market efficiency (a drop of 18 places from last year), revisiting our rigid hiring and firing practices (143rd), and managing the significant tensions in labour employer relations (144th) among other things,” said Bongani Coka, CEO of Productivity SA.
In their Fox trilogy of books, Anglo American's Clem Sunter and scenario-planning strategist Chantell Ilbury also mentioned a number of benchmarks of a winning nation that both local and foreign investors would like to invest in, namely:
- Retaining your cohesiveness as a country. (Kenya is a good example of what can happen if a country loses its cohesiveness.)
- Being focused as a nation. (Just look at Japan and China, whose first priority is to create a state focused on the highest economic growth rate possible.)
- Investing in good quality education. According to economists, SA spends a higher percentage of its gross domestic product on education than most, if not all developing countries. Yet when we test ourselves against other countries we score poorly. The solution however is not only to throw more money at the problem.
"South Africa must get the basics right. We need to fix the education system,” said Allon Raiz, chief executive of business incubator Raizcorp. "This will ensure that a more able youth has the choice of entering the workforce or starting businesses. In this way the young people who start businesses will be those with smart ideas who spot good opportunities, rather than those who do so out of shear desperation,” said Raiz.
Some of the other characteristics, such as a strong work ethic, the successful combat of crime and corruption, the increase in capital expenditure in general, and efficient government, you can be the judge on.
The key question, however, is not as much about whether SA has the characteristics of a winning nation that both foreigners and locals are willing to invest in, but whether we as South Africans are prepared to do something about the implementation, adherence and advancement of these winning nation characteristics or not.
Editor's thoughts:
While productivity will always remain the key enabling factor behind economic growth, the fact of the matter remains that SA seems to be more focused on the redistribution of wealth, than the creation of it. Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts.
Comments
The political leaders made promises that got them in their positions of leadership. However, the non-deliverance on these promises are creating discontent. On the other hand, the goals of the politicians need to be different, if they want to create a sustainable RSA for the future. But this long-term benefit cannot be achieved if short-term sacrifices are not made. And this is then the double blow that creates this bad momentum: They are bound by their promises to do A B and C, but A B and C will not create a sustainable future. Yet they don't even do A B and C. They are supposed to do X Y and Z, but if they implement the unpopular X Y and Z, they might loose their firm grip on power. So in stead of taking the high road of SERVING, they continue to enrich themselves while they still can. At the same time the positive momentum and much needed growth that in THE LONG RUN would have enabled them to really do the much needed A B and C is lost. It has been replaced with a very unstable and hostile environment, that will take much much longer and real self-sacrificial determination of future leaders to turn around. If there are any objective history writers out there, they will refer to this period in RSA's history as a time when a nation's positive belief in it's future was beaten down with a handful of leader's unapologetic self-enriching and waste.
The honeymoon was over many many years ago. The real work should have started. Now everything is delayed. I pray to God that it is not stopped.
Don't get me wrong: My problem is not with the individuals in government. There are people that do stellar work. My problem is with the sour cream at the top that do not LEAD by good example.
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