READERS HAVE BEEN COMPLAINING about my pessimism concerning the new Government, State institutions and the future of the country as a whole. On the contrary, I think I’ve been fairly sanguine over the past couple of years on these pages – taking into account, of course, my natural predilection for negativity, cynicism and misanthropy.
I can point to columns from years back where I said a Zuma presidency is preferable to a Mbeki one and that the Scorpions are our saving grace (oops!). So by my own reasoning – and in line with devil/deepblue-sea, rock/hard-place thinking – things are better now.
If I’ve been unfairly accused of being a Cassandra about politics, my economic outlook has been veritably Pollyannaish. Just one example that goes as far back as 2005. I said South Africa was a much better place to live in than Iceland, no matter what the UN development index may say – putting it at number one. And boy was I right. (You all by now know the joke about the capital of Iceland being R3,50?)
But now I’m worried. Last week’s GDP figure came as a bit of a shock even to those of us who’ve become used to a low rand, high inflation and all-round cost-cutting. I can’t remember what it was like making ends meet in 1984, the last time the economy tanked this way. (Most of my memories from those days revolve around by Frankie Goes To Hollywood, the biggest hit of the year. Yes – it’s that long ago.)
While the rand has recently strengthened (not in time for car or flat screen buyers who’ll see their dream machines increase at least 10% this year), food inflation remains stubborn (and you can’t live on in-store lossleaders alone) and everyone is paying less for the same work or want more work for the same fee. And just when you thought it was safe to get back in your car, oil prices are rising again – up 35% so far this year.
You could point to the fact that compared with Japan (and other places) we’re booming. Two consecutive quarters of more than 15% contraction must be hara-kiri territory. But the at-least-we’re-not-thatbad-off argument rings hollow in most SA businesses and households. Recent research by consumer goods giant Unilever and the University of Cape Town about South Africans’ attitudes towards the recession confirms that.
According to Project Reboot (what?) 60% of South Africans are worried about the future and a full three-quarters are more cautious about their spending and 33% say recession is putting strain on personal relationships (I’d say.) And now that the depth of the recession is better known, that number has probably climbed. And 21% of SA’s citizens claimed the recession has had no effect on their lives. Presumably they all work for Government or have transport contracts with S’bu Ndebele.
This recession is cruel in other ways. Those who’ve been most frugal are now hurting the most. If you’re a pensioner who looked after your money carefully all those years, you’re earning less interest and paying more for everything. Contrary to what Mboweni (or Suze Ormann, for that matter) has been urging us to do, savers are being hit by the great de-leveraging. Those of us who’ve been living beyond our means – I’ll come out and say it, I’m one of them – and didn’t put something away for a rainy day are being bailed out by the church mice. Life isn’t fair.
And while I feel for the economisers, I’m with Cosatu on this one. Cut rates, pump money into the economy and forget about inflation targeting. It worked in Zimbabwe, right?