South Africans are heading to the point where the country will be as wealthy as it was in 1981 — a 25-year gap of economic decline and claw-back — with a per capita income per head of about R24Â 000 a year, futures trend analyst JP Landman told the Cape Town Press Club on Wednesday.
Landman, who serves on President Thabo Mbeki’s Presidential Economic Advisory Group and is also an adviser to the BOE, described this as South Africa’s “lost 25 years”. Importantly, he said the Accelerated and Shared Growth Initiative of South Africa has effectively raised the importance of pursuing high economic growth.
This has also steered the national debate away from such things as affirmative action “and [saving] bloody whales”.
“For the first time we are talking about skills and investment,” said Landman.
Contrasting the focus of the media on news events — including crime and violence — he argued that trend figures provide a more positive picture of South Africa.
Take, for example, productivity levels. In the 1970s productivity grew by 0,27% a year. This dropped to about 0,18% in the 1980s and stayed much the same in the early part of the 1990s. But since 1995 productivity has risen by between 3% and 4% a year.
Pointing out the South African economy is now 33% bigger than it was at the advent of democracy in 1994, he said it has been able to sustain above-inflation increases for the police force, as has happened in recent years, and raise the funds for the provision of social grants, which are now paid out to 11-million people in the country.
Employment has grown from about 9,5-million jobs in 1995 to 12-million jobs. It is true that four million remained unemployed and “really we want 16-million jobs”. However, those jobs cannot be provided by the existing economic cake — it has to grow.
However, growth figures in the order of 4% and a population growth rate of below 1% indicate that progress is being made at about 3% a year.
Landman noted that academic Servaas van der Berg of the University of Stellenbosch has done fine research into poverty levels. The fact is that 41% of the population live on or below the international poverty line of $1 a day in South Africa. But that figure has dropped from 57% in 1970, he noted. “If that is not steady progress, what is?”
Asked about his views on the rand’s prospects, he said that the current-account deficit is “something to watch”. It if stays at 6% of gross domestic product, the currency is “on thin ice”. Asked if he, himself, would invest in gold — which he said is expected in September to reach the level of its 1981 height of $852 — he quipped it could either go down, stay the same or go up. He has no gold investments, he added. — I-Net Bridge