So far this year our economy has been under intense scrutiny. With a looming credit rating downgrade and an economy bordering on recession, there’s no need to recount the difficulties South Africans are facing at this time. Many of us are now asking; where are we headed? That is why we’d like to share this summary of scenario planner Clem Sunter’s address at a recent business breakfast in Cape Town.
Sunter talks about the three potential paths South Africa is facing: “it can establish an innovative, competitive economy that grows national wealth; it can progressively decline into a ‘second tier’ nation; or it could collapse into a failed state. He believes the country is currently on the second path, but that it’s not too late to turn things around.
In Sunter’s analysis, there is some good along with the bad. One of the positives is that government is starting to engage with the private sector to find ways of partnering to get the economy growing. Whether anything actually comes of it is another story, but government seems serious about involving business in ventures including education, renewable energy and infrastructure build. South African businesses have levels of cash on their balance sheets that are at historic highs. Government wants to take advantage of this through partnering with them to invest in infrastructure projects, thereby growing the economy and reducing unemployment.
Sunter also talks about our pockets of excellence, such as the constitutional court, the public protector and even one or two state departments, amidst the many negative aspects in government.
Overall, there is much to be concerned about, but there are also positive signs to acknowledge and further encourage. One needs to be realistic but try and maintain a balanced view.
To read the Clem Sunter article, click here.