The IMF has cut South Africa's economic growth forecast to 0.6% from 0.7%.
South Africa's unemployment at 26%, or 34% real, is one of the highest in the world. This is because of the entrenched structural and political reasons that analysts, investors and ratings agencies have repeatedly warned about over the years.
While there are contributing external and cyclical factors, the most important ones suppressing national growth and employment are outmoded socialist and nationalist ideology, patronage and corruption, mismanagement, a rigid and expensive labour market, low productivity, the ANC's adversarial attitude to the free market and policy paralyses. (I exclude skills because SA has adequate skills for the size of its economy.) These are internal issues that are within the country's power to change, if it wishes.
It compares favourably with, and exceeds, Gauteng's and the national average. It has a lot going for it, one of which is it's the best run city in the country - here things work, the envy of Gautengers. It's futile to bemoan it lacks mining or any other sector because it must use its comparative advantages. This does not mean it cannot innovate and grow. In fact, Cape Town has a diversified economy servicing a large local, national and international consumer base.
But here's the insurmountable problem: Cape Town's limitations and challenges are South Africa's - its fate is tied to national politics, which has never been focused on growth, jobs and development, but big man egos and careerism and patronage.
South Africa's unemployment at 26%, or 34% real, is one of the highest in the world. This is because of the entrenched structural and political reasons that analysts, investors and ratings agencies have repeatedly warned about over the years.
While there are contributing external and cyclical factors, the most important ones suppressing national growth and employment are outmoded socialist and nationalist ideology, patronage and corruption, mismanagement, a rigid and expensive labour market, low productivity, the ANC's adversarial attitude to the free market and policy paralyses. (I exclude skills because SA has adequate skills for the size of its economy.) These are internal issues that are within the country's power to change, if it wishes.
To
quote Dr Greg Mills who has researched political economic systems
around the world, "(South) Africa is poor because its leaders want its people to be poor".
How will stagnating growth affect South Africa's cities?
Using StatsSA's 2011 statistics, Cape Town has the second largest
population (3.7m) after Joburg (4.4m). It's unemployment rate at 23.9%
is the lowest of the metropolitan municipalities (Johannesburg 25%,
Tshwane 24.2%), and below the national average. Nelson Mandela Bay and
Buffalo City have the highest unemployment at 36.6% and 35.1%.
Ethekwini's (Durban) is 30.2%. Cape Town and Joburg have the lowest youth
unemployment, both under 32%, but still high by any standard.
The
city's growth at 2.6% is in third place after Joburg (3.2%) and Tshwane
(3.1%). Ethekwini (1.1%) is ranked seventh out of eight metros.
Contrary
to the ANC's spiteful claims Cape Town is the most unequal city, the
Western Cape province's Gini coefficient of 0.58 is lower, i.e. more equal, than the
national average of 0.65, both high by international standards (1994:
0.59). Its human development index is highest at 0.7708, ranking it as
middle development, compared to the national average of 0.6675. It compares favourably with, and exceeds, Gauteng's and the national average. It has a lot going for it, one of which is it's the best run city in the country - here things work, the envy of Gautengers. It's futile to bemoan it lacks mining or any other sector because it must use its comparative advantages. This does not mean it cannot innovate and grow. In fact, Cape Town has a diversified economy servicing a large local, national and international consumer base.
But here's the insurmountable problem: Cape Town's limitations and challenges are South Africa's - its fate is tied to national politics, which has never been focused on growth, jobs and development, but big man egos and careerism and patronage.
Comments
Post a Comment