SA economic recovery is more dependent on political stability
By Miyelani Mkhabela
JOHANNESBURG – South Africa can emerge from this economic recession and Covid-19 crisis a better nation and transformed when we reflectively act on the socioeconomic challenges as a rainbow nation. Now is the time to unite for the economic recovery and implement the pillars of shared value, shared growth and stakeholder capitalism.
South Africa will need to decide, we can adapt and live or fail to adapt and collapse the economy to rely on imports and continuously experiencing high unemployment. Ideological orientations and leadership preferences will make the South African economy weaker than even 2018, we are running so fast to the pit, recycling the economy and creating problems for future generations.
Coronavirus brought market volatility, uncertainty, complexity and ambiguity in developed nations that had better healthcare standards such as European Markets, Nordic Countries, United States and emerging markets and African countries were deeply affected by Covid-19. It was well reflected and ethical to manage business to save lives and economy, according to the global and South African coronavirus infections and number of deaths. We pause and reflect for the loss of family members, friends and leaders in South Africa and the global community.
Covid-19 put it to us how important having good leadership is and how we can all unite to fight environmental problems facing our nations. The global risk report finding highlights environmental factors at the top five risks and this demands all of us to focus in implementing climate change recommendations aggressively, while having a proper risk mitigation on the loss of assets in this transition.
South Africa can start using complex adaptive systems as a framework for studying, explaining, and understanding systems of environmental factors collectively to proactively manage future agents that are likely to be produced by highlighted environmental challenges and innovate emergent future systems and technology to continuously give a dashboard of elements that needs national attention.
There is also an ever-growing understanding that similar features in complex systems across a diversity of domains may indicate similar fundamental principles at the space and country, and as such there is often utility in using the key features of one system (coronavirus) and gain insight into the workings of seemingly distinct fields.
The Covid-19 crisis is inflicting the most pain on those who are already most vulnerable. This calamity could lead to a significant rise in income inequality. And it could jeopardise development gains, from educational attainment to poverty reduction. New estimates suggest that up to 100 million people worldwide could be pushed into extreme poverty, erasing all gains made in poverty reduction in the past three years.
Policymakers must do everything in their power to promote a more inclusive recovery, one that benefits all segments of society prioritising the crisis of poverty, inequality and unemployment of young people.
South Africa is struggling to unite and deal with racial inequality and share from national resources to redress the setbacks and injustices of the past. More equitable access to opportunities is associated with stronger and more sustainable growth and higher income gains for the poor. But unlocking the full potential of all individuals is not an easy task, it needs compromises from all white and blacks to collaborate in building a strong economy to experience shared growth benefiting all stakeholders.
The reality is that low-income households face higher health risks from the virus, they bear the brunt of record-high unemployment and are less likely to benefit from distance learning as their hospitals are poorly equipped while on the other hand, schools at rural communities are not advantaged with educational facilities aligned with the future of education.
These inequalities are truly shocking, but not unexpected. The JSE-listed companies have a huge responsibility to reflect on South African rural communities to turn them to be resilient municipalities.
Leaving the Cape Town International Airport you are greeted by the impact of South African apartheid, seeing Khayalitsha township on the other part there is Gugulethu, so painful how not reflected leadership can cause in society. Five minutes from the JSE is Alexandra Township, South African government and private sector can collaborate to build facilities in this areas for future generation South Africa.
What needs to be done
South Africa needs a policy response like no other, to directly solve socioeconomic conditions likely to cause century of inequality and unemployment.
These include extra efforts to protect the poor, learning from other countries stepping up in interventions to build New Generation South Africa. South Africa needs to uproot poverty from families directly by sponsoring family members with education and better healthcare, as a system to build resilient communities, municipalities, provinces and one nation that’s equitable.
Six priorities can be used to move the nation from crisis to recovery
- Fiscal and budget discipline to meet the National Treasury commitments
- Increased funding allocation in both basic and higher education
- Restructuring of Eskom and prioritising clean energy funding allocations
- Investment in technology, media and Telecommunications
- Decentralized agriculture and industrialization, mainly in rural municipalities
- Developing resilient small businesses as a solution to economic reset and job creation
South African economic recovery and new normal will never happen over night, we need to make huge compromises to prioritize the common purpose, political and economic instability can be changed when the Nelson Mandela political party prioritizes society over their ideologies and leadership preferences. South Africa can recover faster when we all unite be behind the president and improve in governance and accountability principles for all project funding for SOEs and departments.
Miyelani Mkhabela is a chief executive and chief economist at Antswisa Transaction Advisory contactable at : [email protected] | www.antswisa.co.za