SA is nothing like Australia, New Zealand or Canada

The country has to compare itself with ‘like’ nations to understand its place in the world.
The lesson we can draw from our true peer nations is that even a growing economy will not resolve the visceral social issues we are dealing with. Image: Moneyweb

When it comes to the economy, many South Africans seem to have a warped measure of where the country fits in among other nations.

There is a tendency to think of good old SA as a lesser cousin of Australia, New Zealand and Canada. We might share a common language and an affinity for rugby and cricket, but we are not in their league when it comes to the scale of their economies.

When measured by size, Australia’s GDP is about 3.7 times larger than SA’s and Canada’s is 4.7 times bigger. Although New Zealand’s GDP is only about 58% the size of SA’s, it only has a population of about five million, making it about 10.6 times smaller.

This means the average New Zealander is about seven times more well off than the average South African.

Australia and Canada’s populations are also not that large compared to SA’s almost 58 million, coming in at 25 million and 37.4 million respectively.

So if Australia, New Zealand and Canada are not economic kin, which countries are?

A major emerging economy?

Those who think we are among equals in the Brics group of major emerging economies (Brazil, Russia, India, China and South Africa) are also wrong.

Brazil’s economy is 5.8 larger than SA’s, India’s is 7.5 times bigger and Russia is 4.5 times the size.

For its part, China generates the total output of the SA economy every 10.4 days.

Nor does SA match up to its fellow Brics members in terms of population size. Our 58 million is way smaller than Brazil’s 211 million, Russian’s 146 million, India’s 1.36 billion and China’s 1.43 billion.

So who are SA’s peers?

The World Bank answers the question of who SA’s peers are, in part, by grouping countries according to income – low, lower-middle, upper-middle and high, based on gross national income (GNI) per capita in US dollars – and taking population size into account.

But even ranked in such a way, it parcels together countries that seemingly have little in common. SA, for instance, is in the upper-middle income group, which also consists of Turkey and Fiji. Although these countries have a GNI per capita of $4 126 to $12 735, there is a 82.5 million difference in the size of their populations.

A closer look at the upper-middle income group shows there are a few countries – Thailand, Colombia and Argentina – that share some similarities when it comes to population size, GNI per capita and total GDP in US terms.

 

South Africa

Thailand

Colombia

Argentina

Population

57.7 million

69.4 million

49.6 million

44.4 million

GDP in US dollars

$368 billion

$504 billion

$330 billion

$518 billion

Gini coefficient

63.0

36.5

49.7

41.2

GNI per capita  

$5 750

$6 610

$6 190

$12 370

Annual GDP growth

0.8%

4.1%

2.7%

-2.5%

Source: World Bank

But even in this group, SA is a laggard.

Its total GDP is higher than Colombia’s, but the South American country is growing at a much slower rate. Argentina’s economy has gone backwards but its total GDP is larger than SA’s. Thailand outperforms SA in GDP growth, size of economy, and income inequality.

But these numbers don’t tell the whole story.

These nations all have an industrial base, but also have a sizeable number of poor people.

In Argentina, the number of people who cannot afford to pay for their basic needs stands at 15.8 million, according to its National Institute of Statistics and Census.

Read: Fears of Argentina default loom large as traders dump everything

Colombia’s National Administrative Department of Statistics says that about 9.7 million people live in poverty but about 15 million people “feel” poor.

Thailand’s National Economic and Social Development Council says there are about 7.87 million Thais living below the poverty line. 

In SA, the number of those living in poverty is considerably higher – 23 million people, according to Statistics SA.

This means these four newly industrialised countries are trying to figure out the next phase in their development while dealing with poverty levels ranging from Thailand’s 11.7% to South Africa’s 40%.

Those controlling the levers of power in these counties are trying to reduce poverty by fostering growth in their respective economies. So far, this strategy has proven to be a work in progress as economic growth has shown itself not be the silver bullet that can eliminate all social ills.

Read: Addressing deep-rooted challenges urgently

Colombia, for instance, has a growing economy but this has not prevented widespread protests calling for an end to economic inequality and corruption.

There is a similar story in Thailand, where, despite a robust economy and success in bringing down poverty, decades-long political standoffs have also led to widespread protests.

Argentina, for its part, has for over a century been on the cusp of becoming a developed country. It has, however, just re-elected the party that created the economic mess it is currently in.

We are not alone

As South Africans we tend to think our problems are unique. That we are alone in dealing with an inept government, chronic civil disorder, a standoff between the haves and the have-nots, and seemingly endemic poverty.

We are not. The countries most like us are going through similar challenges.

Read: Guns or yoga? City crime fighters in South Africa and Colombia

The lesson we can draw from how they are dealing with their transformations is that there are no easy offramps to success – and that even a growing economy will not resolve the visceral social issues we are dealing with.

 
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At least we still compare favorably when compared to Zimbabwe, South Sudan, Somalia and the DRC.

Give it a while and we’ll get there. All the ingredients are present for Zimbabwe number two. Demography is destiny.

Our economy isnt growing and our population growth is out of control.

These 2 factors combined do matter.
Also Argentina is twice our size in terms of nominal land mass.

Who are south africa’s global peers?
Nigeria. Botswana. Namibia.
Zimbabwe.

I think Nigeria is outperforming SA so probably not a peer.

Loser countries I am afraid

More like Trump’s description – but then I guess we do need to be polite.

South Africa’s population growth is not out of control. Unlike the rest of Africa. Facts matter.

They do.
SA has 60 million people on 1.2 million square kilometres. We were at 30 million in 1980’s. I would guess this country’s maximum capacity to be around 35 to 40 million, 45 million tops.
At the current birth rate alone the population will double in another 40 years. Less perhaps since an alarmingly high number of babies are never registered and this is all excluding the mass of northern immigrants that keep moving in here.

I fear though that we have one attribute which is unique: this toxic mix of laziness, stubborn African pride, entitlement, victimhood and a refusal to be held accountable for anything. Any society in which children burn down a school because they are dissatisfied with their exam results without being punished is doomed to fail.

100 % jnrb , and if the author bought in crime stats as a comparison , your point would have been further highlighted ! The will to work to prosper , over the will to to get something for nothing !!!

Add racism(overtones in this comment), greed and entitlement of white South Africans to that cocktail as and you have a perfect mess on an industrial scale.

When comparing countries, it always fascinates me how selective the ANC is. When it suits them, we must have have a health or education system like Britain or Sweden, but when confronted with our inadequacies, it must be remembered that we are only a developing African country. Surely you cannot pick and choose ? As far as I am concerned, if our politicians truly aspire to be proudly African with all the lovely stuff that comes with it, get rid of that awfull German colonial car, and use a true African mode of transport, the donkey cart.

The donkey cart is also an colonial import. Sled is more appropriate.

…not even a sled *lol* (sleds originated from ancient Eqypt, and proceeded to the Vikings, etc)

African transport prior 1652? The mighty power of the foot.

#Michealfromklerksdorp, or whatever fitted onto their womenfolk head?

We should compare ourselves to countries that have a similar political economy as our’s. We are a mixed economy on paper. In theory, we are a constitutional democracy and a market economy with property rights and the rule of law, with a socialist government that owns the means of production through the SOE’s and the municipalities. The reality, however, is very different.

As described by August Hayek in “The Road to Serfdom”, the proportion of socialist strategies never remain constant relative to the free-market strategies in an economy. There is an ongoing push towards increasing socialism, away from property ownership. “You cannot remain a little pregnant”. “Fascism is the stage reached after communism has proved an illusion”. – August Hayek

What started as a free-market economy where the rule of law and accountability was enforced, has evolved over 25 years to reach a state of lawlessness, unaccountability of public officials, rampant criminality, increasing infringements on the right to own property and the rule of demagogues. What was once described as the best constitution in the world, is now nothing more than a crumpled piece of paper lying in a toilet in Luthuli House.

The infringements on property ownership started when the law was perverted to legalise the theft of property through BEE, EE, labour laws, the minimum wage, the nationalisation of mineral rights, the redistributive municipal tax, the high personal income tax, the taxes on capital, the security of tenure laws, the Mining Charter and cadre deployment at SOE’s.

We should not fool ourselves with comparisons to free-market economies. We should compare ourselves to nations who implemented similar socialist strategies, and who did not turn back from the brink as Brittain did under Margaret Thatcher. We should compare ourselves to Russia under Lenin, Cambodia under Pol Pot, Uganda under Idi Amin, China under Mao, Venezuela under Maduro and Zimbabwe under Mugabe.

Then, it is clear that we are not nearly as bad…….yet.

… and Chile under Pinochet.

Wrong. Pinochet wat a dictator, but he implemented free-market policies and turned the Chilean economy around. His successor, however, turned back towards socialism. GDP per capita rose by 230%, life expectancy increased from 65 to 82, and inflation went down from almost 800 percent to 2 percent, under the Pinochet regime.

But this changed with Ricardo Lagos of the Socialist Party, elected in 2000. His Ministry of Planning and Cooperation released a report waging an official war against inequality and undermining the “neoliberal system”.

This was the beginning of the end for Chile, just like the ANC was the beginning of the end for South Africa.

“Argentina, for its part, has for over a century been on the cusp of becoming a developed country. It has, however, just re-elected the party that created the economic mess it is currently in”

Typo error at start of first sentence

Great article. Maybe follow up with a comparison on tax rates compared to our real peers. And how NHI is doing with our peers…..

Sorry to say but our politicians still have the misconception that sa is the usa of africa – sa is economically not a drop in the ocean incomparison with north america,europe, china, australia, japan,taiwan,etc.

as long as the government has the laid-back attitude of “somebody or something in the world owe as something and we are waiting for it, sa have no chance to accelerate any economical growth whatsoever.

The problem in South Africa is that we have a small 1st world component and a very large 3rd world component in one country. Apartheid is gone but now we have economical apartheid. The so called ‘haves’ are not only the whites. The Rainbow Nation, as far as I am concerned, exists of ‘haves’ of all races. They are the hard workers with ambition to look after themselves and create wealth to cover their own needs.

SA economy hasn’t changed much since 90s.. that’s the issue.. elsewhere the way companies work, structure and value labour is very different. From a country perspective, SA as a whole, is pathetic at using its resources in both public and private sector. Part of this problem is due to overvaluing management across the economy.

Only specialists that stay in SA are paid well or stuck in SA. Ask a kid who realizes they need money what position is offers value vs money and it’s mostly management (public or private). <—- that’s a huge problem.

2nd paragraph entry …..spot on

An interesting commentary, but which adds little to pointing a way to a solution.

Articles without “solutions” just add to the general noise, and are a wasted opportunity for author and reader alike.

I think you miss the point. This is what SA can / should aspire to. 40 Years ago the SA Econony was as big as Australia, by all measures. We have regressed dramatically.

Agreed.

SA used to punch ABOVE its weight.

Now it is plummeting into being just another African basket case.

We all know that. Already!

What’s the politically practical solution to return to our former glory?

Lots of “handwringing” is NOT an answer!

Not true.

40 years ago SA GDP was $83 billion vs. $163 billion for Australia and $276 billion fro Canada. So Australia’s economy was 2x larger and Canada’s 3.3x larger. So SA growth has lagged but it was never as large economically as Australia or Canada.

Perhaps rigorous debate will offer a solution… if the awareness is created (as this article is doing) it might spark further discussion and so on…

27 Years ago we were very much in comparison to those countries, we were a first world country, our economy was growing, our currency was strong. Then in 1994 the ANC took over, slowly sinking into a ????hole country, now we part of the rest of africa’s 3rd world countries.

Your facts are wrong.

Compared to other population groups, there has been explosive growth of the non-white population.

Nor has there been ANY useful drop in the birth-rate of the poor.

You can clearly see this in the chart of SA Population Growth (Google it).

Your assertions are at variance with the reality of the actual population growth. Google the SA population growth chart for the reality.

And in the meantime, the population has increased exponentially, with the education of this mass of youth decreasing.

The most expensive electricity in the world in 2019, minus the cheapest electricity in the world in 1994, equals 25 years of ANC rule.

You see, according to this equation, our economic growth rate must trend towards zero because our economy was built on the oversupply of cheap energy. Now we have a shortage of unaffordable energy. Our economy is not structured to compensate for the Luthuli House disaster.

Only nature (sun and wind) can save us now.

Yes, sun and wind are the answer, but our disgusting greedy unions (yes, NUM, we’re looking at you) would happily sacrifice South Africa for the sake of a few thousand workers. The fatcat union bosses don’t want to lose their lovely dues if – what really needs to happen – the dead wood in Eskom workforce is cut.

Excellent article. We are a dirt poor country in many respects. Low GDP per capita, no growth, corrupted from head to toe and failing infrastructure .Worse we have colossal population growth, captured judiciary, are poorly educated and frankly speaking very lazy. Poor folk in the countries mentioned live better than our middle class with huge social support for unemployment, retirement, security and education.

We should-and could-aspire to be more like the winners than the losers but with very poor leadership by the ANC(or worse the VBS looters) that is not going to happen.

Any sane educated or wealthy person should leave these unhappy shores.

It’s quite obvious that the countries that have left us in the dust are generally governed with contemporary economic doctrine which is at the forefront of creating prosperity.

The countries in the doldrums (SA included) appear to generally be governed by idealistic governments, that pursue destructive policies such as equality of outcome (another name for BBBEE) and socialist/marxist tenets.

Would be very interesting if this could be factored into the comparison.

Singapore and China has shown the way to success with a strong focus on high economic growth and low population growth.

SA is probably a 30% second world and 70% third world economy. The second world part equates with Australia, NZ and Canada whilst the third world part equates with their peer group in Botswana, Zimbabwe and Mozambique.

Solutions should be developed accordingly. SA’s high unemployment rate is only in terms of formal, second world jobs – there should be a much greater emphasis on the informal economy.

The poor education system is partly to blame for the high unemployment. A 30% pass rate and the ability to only speak African languages is not the tool that will be used to break the back of unemployment, and in SA the informal sector of the economy needs people who have the will to progress, not only the will to claim benefits from SASSA.

As a country, we have regressed. Yet those in charge, the ANC, Their voters, and their comrades from various countries and also from the Saxenwold clubhouse too, they have ruined any chance that SA will be great again. The price to pay for a return to the former glorious SA is just far too high a price. It will never happen while the present regime has their fingers in the cookie jar and while they are busy raping your wallets.

Vying for mediocrity. Almost seems we should go back to the British, hat in hand, to beg for dependence.

Not the British. Will be CHINA this time around, the continent’s growing colonial master.

Sure. But the listed countries are commonwealth realms and constitional monarchies under HM Elizabeth II. And there’s no doubting the sucess of those countries. SA would’ve been a part of that. But chose to go it alone. Had we remained, China wouldn’t be an option. And neither would our current state of affairs. GSTQ.

What a pointless article. I have never come accross anybody that groups SA with Oz, NZ or Canada from an economic perspective.

It is another attempt to try and paint a picture of “things are not as bad as it seems”

The statement that growth does not resolve problems is rubbish. Go and look at success stories like South Korea, Singapore and yes Thailand and see how standard of living has improved.

To randomly select a few countries on no basis except that its economy is roughly the size of SA and to then somehow conclude that economic growth is not as great as it is made out to be is mind bogglingly poor analysis.

Without growth nobody position in SA will improve. Period. Redistribution of assets will just lead to talented people leaving the country, leaving everybody worse off. Ask Zim, Venezuela, North Korea etc etc.

By the way they dont really play rugby or cricket in Canada.

Ice hockey and Lacrosse, winter and summer national sport. My best team
Montral Canadiens, Stanley cup 24 times.

One should also add population demographics to the comparison. Our population is much younger than Thailand, Argentina and even Columbia’s population. We have a lot more young people without prospects, with only a modest education and nothing to lose. This complicates the picture considerably.

No other country has the ANC or EFF : Therin lies the Problem in Simplicity . Mamparas without a Clue in Charge .

Canada, NZ and Canada are not perfect but they’re civilized and civilized is something South Africa is not capable of.

Should be ‘Canada, NZ and Australia’.

Thanks for confirming my previous observations regarding Brics etc here, but essentially we are an African state, unique with all the attendant cultural drags on the economy: tribalism, the value of land over industrial production, paternalism in a patriarchal society and a lack of basic education equal to international norms. And as with Eskom, a lack of interest in maintaining any infrastructure.

Of course, the big one is an attitude that once you’ve made it into privileged status as a government official, the treasury is yours to plunder for the benefit of your F&F – family & friends..

We are more in the league of Kenya, Tanzania or perhaps Morocco.

….add Ethiopia.

Ethiopian Airlines has OVERTAKEN SAA as the continent’s No.1 rated airline.

…..with the guidance and tech assistance of American Airlines

The Chinese are doing wonders in Ethiopia. World class tram system and shopping Malls. It look like China is Emergency life support when it pair up with a “decrepit” economy

Sadly Chinese resuscitation is the core of Addis Ababa ….move from the centre and it’s like a gradually time path back to the “monolith” Space Odyssey 2001

What the writer is implying, because SA has slid down various Global Rankings (there’s too many to mention), we need to compare ourselves to our mid-to-bottom ranking peers.

But hold a second here….

It’s like the track athlete at school. Initially this kid started competing against the top tiers of his group, but years later he/she moved down the rankings to the The B or C team.

Now SA needs to compare ourselves with the “D league”.

That’s because many believed to be entitled to take part in this sport, irrespective of experience & competitiveness. Now the whole, enlarged “Team SA” is bloated, and we hobble along in a group as fast as our slowest athlete.

Team SA needs to lose weight! (physically & figurative). WE are going to end up playing in the circle of the FAT LOSER boys/girls.

Nope, we cannot compete against these countries:

I must hand it to the average CANADIAN citizen: they will beat the average South African’s socks off in Ice Hockey!

Forget about competing against the SWISS in skiing either!

Australia? Very few S’Africans can throw a boomerang like an Aussie, that’s for sure!

And we even can’t play Rugby as well as the New Zea……wait, got to think of something else here.

(Be fearful when SA is no longer the world leader in braaing “wors & chops”…)

Be fearful when LESOTHO starts to overtake SA in certain rankings!

“Me and my family, we will EMIGRATE to Lesotho!” (Yes, I know it sounds weird today….but lets not laugh in 2040)

Not an official ranking but Lesotho army kicked the butts of ours. Of course, ours is run along the same lines as Umkhonto was but point is Lesotho had ovetaken us in at least one thing.

Id bet their zama zamas have a higher gold output than our union comrades as well

Does NZ, Aus and Canada have loadshedding?

South Africa has a history, a very destructive history. Black were treated as second class citizens, indoctrinated in to accepting being second class citizens via Bantu education and now they are expected to grow confidence without being untaught these toxic behaviours. They are told to get up and do it themselves when they were taught for years that they are incapable of anything other than to do gardens and iron clothes. They are expected to get up educate themselves and stand on their own when they were taught for years that they need a job from the white man. Though we seem to remeber the discrimination ways of apartheid, there is a far more psychological damage that was done and there is no visible effort to recognize undo that.

Shao: kids at uni today never experienced apartheid. Yes, apartheid was bad, terrible, no question. But after 26 years of ANC (mis)rule it’s time to man up, grow a pair and get honest with ourselevs. Education today for most SA kids is no better than Bantu Education ever was….. in some respects even worse. Matrics come out of school barely able to read and write….. you almost have to apply to fail matric these days.

How long are we going to keep blaming apartheid for what is wrong in SA …? 50 years….? 100 years …? How long before we are honest enough to admit we have an uncaring, incompetent, thoughtless government intent only on enriching themselves and their friends at the cost of our country …?

I know how it feels my brother. It is how we decide to react that makes all the difference, and how we decide to react is a function of our belief system.

My ancestors lost their property in the Anglo/Boer war. Their property was burnt to the ground, livestock destroyed and women and children incarcerated in terrible circumstances in the concentration camps. This was due to the scorched earth policy of tiny, puny, pathetic little Great Brittain. Now, we honour and respect our history, our heritage, our previous enemy and we have compassion for our brothers and sisters who are the descendants of those who oppressed and killed us. We honour and respect their traditions and we work together to improve life for everyone.

That was the decisions we made, and that brought us to the financial position we find ourselves in today.

I understand psychological damage, but healing can come only from the attitude of the affected individual. No amount of retribution, money, special privileges and handouts can cure the slave mentality. All these things only strengthen the slave mentality.

We have to accept some accountability and responsibility and stop making excuses and blaming others.

End of comments.

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