Prof sheds light on the state of the economy
Members of the Graaff-reinet Chamber of Commerce were treated to an interesting and thought-provoking talk by Charles Wait at their recent meeting, held at the Drostdy Hotel.
Wait, who is an Emeritus Professor of Economics at the Nelson Mandela University, gave his views and interpretation on the current state of the South African economy.
The current technical recession was explained as being a term used due to the decline of the country’s GDP for the second successive quarter. Wait enlarged on the six variables that give a temperature reading for the economy, with secondary indications including a very real concern in this area, that of unemployment.
Wait used the analogy for the state of the economy of a computer program running quietly in the background, while other work is in progress.
Three intangible areas were discussed. In the area of ethics and corruption, he pointed out that a report issued earlier this year showed that South Africa dropped to a low score of only 43 out of 100 between 2016 and 2017, compared with Norway on 86 and New Zealand on 89. A score of 100 represents zero corruption, so South Africa has a long way to go! Corruption in the private sector is quickly punished, but there is a much slower process of disclosure when it happens in the public sector.
Other intangibles include ideas and entrepreneurship, where new businesses need support and help to overcome endless red tape.
The final intangible raised was the state and confidence in the South African economy. Wait pointed out to the audience that all those present had succeeded because someone had confidence in their ideas.
He also talked about the fourth industrial revolution, where computers are seen to be taking over jobs previously done by humans. An interesting analogy, pertinent to South Africans, was used. “When we changed from ox-wagons to lorries we discharged two of the three essential persons who operated an ox wagon - we created a 66% unemployment rate. What if that scared us from switching to lorries?” said Wait.
“South Africa’s problem in this matter is mainly one of retraining the two persons who are no longer needed to operate an ox wagon to become motor mechanics or auto electricians.”
The talk concluded with some solutions for long-term progress, including an encouragement to return to a valuedriven society with a strong work ethic, where people respect institutions that instil confidence. A clear understanding is necessary of the relationship between public and private sectors, and their interdependence.
“Don’t try to fix what is not broken, but rapidly and effectively fix the ones that are broken” concluded Wait.
Emeritus Professor Charles Wait recently addressed members of the local Chamber of Commerce at the Drostdy Hotel.