South Africa – year 17

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By Cees Bruggemans, Chief Economist of FNB.

It is 17 years today since we all voted in our fully inclusive Democracy. What’s the score?

As much as the French had achieved by 1806 since 1789? Or the Russians by 1934 since 1917? Or the Indians and Chinese by 1964-1966 compared to 1947-1949? And Japanese and Germans by 1962 since 1945?

Certainly there has been freedom for all, a quality one doesn’t always fully appreciate until it is lost, and the power of which infuses new vigour into any society when it is gained and allowed to bloom.

There has been upliftment and empowerment, in the two million addition to the middle class, and the rich expansions of political, commercial, professional elites.

The electorate is today about 23 million strong, a major achievement for a 50 million population.

Economic growth has averaged just over 3% during this period, not far off the modern 20th century average of 3.5% (and spot on if it hadn’t been for the horrific global crisis of 2008-2009).

The real national income rose by about two-thirds during the period. Some 2.5 million formal jobs were added, the taxpayer base more than tripled and 15 million welfare recipients were created.

Millions of houses were build, telephone and electricity connections made as the urban areas expanded hugely.

Especially our communication infrastructure, airports and harbours were impressively expanded and modernized.

Also, population size started to stagnate, after 2000 only growing minimally, mainly from African immigration.

Over the period we received about three million Zim and other refugees. And we roughly lost a similar number of people and their scarce skills overseas through emigration, creating a huge modern day Diaspora of South Africans Abroad.

It was a swap highly beneficial to the receiving countries but extremely costly to the contributing ones.

As if we could afford it, subsidizing the likes of Aussie, Kiwi & Looney, but also Middle East, Europe and many Asian hubs, with our expensively acquired skills and experience.

What we didn’t quite lick was unemployment, still increasing by half between 1994 and 1999 from 4 to 6 million, thereafter stagnating in a 6-7 million range (about a third of these discouraged work seekers).

The incidence of crime rose steeply during the period and has for many changed the way they experience daily life.

So there may have been more political, social and economic freedom, but much peace of mind was also lost.

Not all discrimination was eradicated from the country, today persisting in different guises and intensities than before, but for those experiencing it real enough.

We also used up most of our spare physical infrastructure capacity (electricity, railway, roads, water), in certain instances only doing minimal maintenance, often not succeeding in allowing effective capacity to stay in line with the needs of the expanding economy.

We do keep twelve million kids in school, but apparently could do a lot better than what we seem to be doing, going by achievement scores and international comparisons.

So relative to 1994 much has been gained, some things have been lost and yet other things have stagnated. Unsaid are the things we could have achieved, had we done things differently.

It is an opportunity loss keenly felt by some of the present transition generation (as much the unemployed as the working generation that could already have been richer than what it actually is).

Far distant future generations probably won’t know what they have missed out on, since they will in any case be many times richer than our generation and the choices of today by then probably long forgotten if South Africa continues on a path guided by common sense and doesn’t allow itself to be side tracked into costly adventurous detours.

Lucky them.

Source: Cees Bruggemans, FNB, April 27, 2011.

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