Get­ting to grips with the next 20 years

Finweek English Edition - - INSIGHT - BY LIESL PEYPER

What will South Africa and the world look like in the next two decades? A lo­cal sce­nario plan­ner and an in­ter­na­tional fu­tur­ist pro­vide some an­swers.

All sec­tors of the econ­omy need to have a proper u nder­sta nd­ing of t he world we live in and how changes in that world will im­pact us. At a re­cent in­vest­ment in­tel­li­gence con­fer­ence, co-hosted by Glacier and San­lam In­vest­ments in Johannesburg and Cape Town, a team of ex­perts shared their views on how to shape up for the changes and chal­lenges that lie ahead.

SA STUCK IN A RUT

Frans Cronjé, CEO of the In­sti­tute of Race Re­la­tions, au­thor and sce­nario plan­ner, can’t see how South Africa will turn the ship around any­time soon. “Just like a house­hold that is run­ning out of money, the South African gov­ern­ment has l imited op­tions,” he says. The gov­ern­ment’s cur­rent eco­nomic pol­icy doesn’t al­low for the econ­omy to grow any faster, while bor­row­ing more money is also off the ta­ble due to our high debtto-GDP ra­tio.

“Through t he ANC’s s hrewd eco­nomic man­age­ment in the late 1990s, it man­aged to bring down debt lev­els into the 20 per­centiles, but that picked up again in the global f inan­cial cri­sis. The cri­sis passed, but debt lev­els have con­tin­ued to es­ca­late,” Cronjé says.

“By the end of this year we’ll be back at the debt-to-GDP ra­tio we were at dur­ing apartheid. We’re ex­pe­ri­enc­ing dis­in­vest­ment, vi­o­lent protests and un­cer­tainty – this in an era dur­ing which other emerg­ing mar­kets are lead­ing global eco­nomic growth and have over­taken ad­vanced economies in pur­chas­ing power terms.”

While gov­ern­ment hopes to rein­vig­o­rate the man­u­fac­tur­ing sec­tor, the un­re­li­able elec­tric­ity sup­ply could be a stum­bling block.

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