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12 January 2012 16:34

South Africa’s economic prospects in 2012

Cees Bruggemans says the world financial system and economy won’t collapse.

JOHANNESBURG - Evita Bezuidenhout probably put it most clearly. Freely translated, she had this to say about the year ahead:

“We won’t have much of a government this year because they are fighting so much among themselves they haven’t got time for much else. It is going to be a healthy year for South Africa, but we will all have to work hard at it to make it happen. It won’t be given to us on a platter……” (Die Burger 3 January 2012)

This is a remarkable insightful view. We have to struggle with what we have, however imperfect, especially infrastructure. Most of us will be giving it our best, hoping we won’t get a global wave hitting us sideways and overturning our little sloop.

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05 December 2011 23:26

Anchoring global growth

Are things really dire with worse to come in 2012?

The breathless daily news flow continues unabated.

• Israel cuts interest rates as risk of more global weakness.
• Chinese PMI suggests more industrial weakness.
• Commodity stockpiles keep growing, suggesting a weakened demand and easier prices.
• European crisis is still deepening, with fiscal austerity and credit shocks inducing recession, and capital markets increasingly in uproar.
• US set to tighten fiscal policy, increasing headwind to growth even as building and construction sectors remain missing in action.

Given this kind of daily bombardment, one can be forgiven for having a negative view on the global growth outlook.

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28 November 2011 11:22

SA can break its destructive dynamics

Reform must not be considered dangerously incompatible with political survival.

JOHANNESBURG - It is heartbreaking to realise that the country has it within its means to outperform and change its destructive dynamics, yet may not do so soon.

Listening to various discussions of the new Vision 2030 released by the National Planning Commission, it is obvious that there isn’t some fatal flaw in the diagnosis as to what ails us or that the means and technique is absent to do something about it.

Indeed, if one is allowed one wish about the past 20 years it is to ask that meritocracy should never have been suspended and sacrificed on some greater altar.

The skills, experience and goodwill on offer would have made for a much faster pace of sustainable development than historically the case.

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14 November 2011 08:44

Three challenges facing South Africa

Cees Bruggemans looks at three major dimensions facing South Africa.

JOHANNESBURG - Last week saw three major challenges facing South Africa reach the news headlines simultaneously.

The SARB Governor in her monetary policy committee statement referred to the European crisis as lacking meaningful progress towards resolution, with major implications for the region and those exposed to it.

A day earlier, Moodys had put South African government debt on watch for a rating downgrade, a shot across the bow that shouldn’t be denied (as some immediately were prepared to do) or swept under the carpet and ignored.

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14 October 2011 15:16

Rand prospects

Cees Bruggemans considers three options that could have a major bearing on us.

JOHANNESBURG - After a decade-long overvaluation, rudely interrupted in late 2008 by a severe bout of global risk aversion and rand undervaluation, the rand finds itself today once again subjected to a spell of global risk aversion on account of the European debt crisis, its severe overvaluation reduced to mild proportions in 7.50-8.50:$ territory. 

Little of the rand’s movements since 2002 had anything to do with domestic reality. This may well continue to be the case for some years to come, as global events loom large where rand asset classes are concerned. 

To foresee where the rand will be travelling next week/month/year/decade, one needs to be most clairvoyant regarding coming global events.

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