‘Belgindia’? That’s where we are now

NORMALLY, my humility would force me to name the person who introduced me to the term “Belgindia”, but that would inflate an already inflated ego beyond what’s imaginable. He’ll just have to lay claim through this introduction.

Brazilian intellectuals refer to their country as Belgindia, meaning a country with a small and affluent minority, Belgium, within India, a disenfranchised majority. A definition most fitting for South Africa.

And while the growth of the black middle class has enlarged the size of “Belgium” and been seized upon as one of the successes of the first two decades of a democratic state, a much larger “Indian” question remains. It’s becoming a more complex problem as the years of slow growth pile up.

The student protests over fees are just another in a long list of priorities we all have to deal with.

High growth levels tend to hide or paper over the cracks in any system — ask a Greek citizen about his life before 2004. Our gremlins are highly exposed at the moment.

The cliché is about taking advantage of a crisis, and I think we should be thinking along those lines. In times of low growth and uncertainty, “Belgindia” should be our focus.

Growth will return and when it does, both the government and business will be too drunk on its highs to consider the structural flaws in this country. They will roll over to be dealt with on another day.

I’m not part of the brigade that has consigned any chances of future growth to the dustbin.

After three years of disappointment, US banking group Goldman Sachs expects emerging markets to recover in the new year. The bank expects the uptick in global growth to continue and, combined with weak currencies, to alleviate economic imbalances in the emerging markets world.

In a world flooded with economic reports and data, the report from the bank was perhaps the first bit of hopeful reading on emerging markets that I have come across since the beginning of last year.

Russia, India and Poland are listed as the frontrunners in the recovery, with South Africa, Colombia and Turkey still needing to tackle current account imbalances.

On the valuation front, the bank said emerging market currencies aren’t expensive.

Should the bank’s forecast turn out to be true — and we should all be hoping it does — and the positive sentiment spreads to all emerging markets, South Africa Inc will benefit.

The rand is one of the most liquid emerging market currencies in the world and is a bellwether of risk sentiment. Should such currencies come back into favour, however slightly, the rand could be set for a better season.

A stronger rand with a depressed oil price directly feeds into much lower inflationary pressures and, importantly, more disposable income. And

When growth returns, maybe with a new presidency, we’ll quickly forget

depending on our drought conditions, a firmer currency will be beneficial if we have to significantly import white maize. Some positive spin on 2016. This in no way means we are out of the woods, but given the level of economic depression, any good news is long overdue.

But I feel that while we are down here, with people ready and willing to accept our harsh truths and the valuations showing them, not enough is being said or done to address our “Belgindia” syndrome.

When growth returns, which may even be with a new presidency, we’ll quickly forget.

This stream of negativity will at some point change course, and it may very well be through no intervention of our own. Our context is as much a case of outside factors as our own.