SA's economy: Forget the war room. It’s time for a panic room.
- The economy is weakening more quickly than even its most pessimistic critics suggested.
- At the core is Eskom and its inability to supply affordable and plentiful electricity.
- Economists who have been sounding warnings for more than a decade are spitting mad.
- For more, go to Business Insider SA.
How long till we get a task team, another investment summit or a war room to tackle “challenges” in the economy? I give it a week before we get some great pronouncement on a plan to save the economy.
Make it 48 hours.
It will be filled with promises and platitudes and not an ounce of practical reality when it comes to tackling the crisis.
Forget the war room. It’s time for a panic room.
If you go to London’s Green Park, you can visit Winston Churchill’s war rooms: an underground bunker complex built beneath the UK Treasury building at the heart of government. It was from here that Churchill masterminded the war against Adolf Hitler. The walls are festooned with maps. It was the epicentre of all war-time communications. Information came in, was analysed and critical decisions were taken, using the best available data of the time.
Not long ago, SA was awash with “war rooms”. Fat lot of good they have done us.
It’s way past time to up the ante.
It’s not like we don’t know what is wrong. S&P and Fitch have long made it clear that they cannot recommend the country as a viable investment destination, and after today’s shock 3.2% decline in GDP in the first quarter, it cannot be long before Moody’s chucks in the towel too.
The IMF was in the country last week, and it too added to the chorus of what is needed: liberalised labour laws, policy certainty and the plethora of well-worn phraseology which government has either ignored or has been too afraid, or incapacitated, to tackle head-on.
Economists who have been sounding warnings for more than a decade are spitting mad.
George Glynos from ETM Analytics on Twitter: “It’s a clear function of maladministration, corruption, malfeasance and all the structural decay it has bred. Sad to see the degradation.”
Chief Economist at Stanlib, Kevin Lings: “The intense focus on politics over the past number of months meant the economy lost focus as everyone adopted a wait and see approach. Expect further downward revisions to SA GDP growth in 2019.”
Mike Schussler at Economists.co.za wrote: “40 quarters of GDP changes. 20% of the time there were declines. Lately declines have become bigger and more frequent. 6 out of last 16 quarters show a decline. This will take time to turn around. SA needs hard work and leaders that tackle this without fear.”
The collapse in growth is as a result of multiple failings in recent years. The state capture crisis, aided and abetted by a clique of political leaders, contributed directly to the parlous state of the economy.
“3 out of 5 quarters of decline under president Ramaphosa. The worst growth record of any SA leader at least since 1945. SA needs leadership and not more investigations, commissions, etc. SA needs you to take the buffalo by the horns - lock corruptors/traitors up,” fumed Schussler.
Normally mild mannered economists are ramping up their language.
Imagine the rage building up in regular people.
Bruce Whitfield is a multi-platform award-winning financial journalist and broadcaster.
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