What will the economy of South Africa look like in 10 years? This was the starting point for Professor Andre Roux this week at the annual school of business at Stellenbosch University in Cape Town. Roux, the program manager for future studies, spoke about the SA’s trends shaping the current political, educational, and technological environment, highlighting the seven “tilt points” that will determine the country’s economy in 2030.
- Downturn in global competitiveness.
SA has lost 20 positions in the WEF global competitiveness index in just two years, Roux said, and now ranks 67th out of 140 countries, down from 47 two years ago.
“This indicates that our competitiveness is declining compared to other countries,” RouX said.
- Dealing with a democratic surplus
By comparing the level and speed of democratisation with the level and speed of economic progress, you can determine whether you have a surplus or deficit of democracy, Roux said.
China, for example, has achieved remarkable economic progress, but has not experienced an equal pace of democratization and is therefore experiencing a democratic deficit, he said.
Meanwhile, the SA’s democratisation advanced drastically, but was not accompanied by a corresponding improvement in living conditions. Therefore, the country has a democratic surplus.
“In any case, the presence of surplus or deficit means that there is a disequilibrium. When non-equilibrium forces arise to try to restore balance, these forces can be unpleasant,” he said. “Democracy without economic liberation is probably not so perfect for everyone.”
- Social capital
“The World Bank says that social capital is the glue that unites people and institutions. Without it, we cannot achieve sustainable growth, ”Roux said.
And some polls by, for instance, the Afrobarometer group point to a decline in trust in important institutions such as the president
- The right skills for today
According to Roux, over the past few decades, the South African economy has moved away from a strong dependence on industries such as mining and agriculture to rely more on the services sector. But the country’s labour force and education system does not change at the same speed. “We do not produce enough people from the education system who are able and able to get a job in the service sector.”
- Generating sufficient savings
South Africans are not big savers.
“There is ample evidence that you need a certain level of savings to finance a certain level of investment, which, in turn, will help achieve economic growth,” Ru said. This, he said, requires a level of savings of about 30%. SA savings of about 16%.”We just do not like savings, and because of this, we are fighting for the financing of investments.”
- Autonomy of democratic institutions
The autonomy of the SA’s democratic institutions is enshrined in the Constitution, and this is probably the hallmark of the SA’s democracy. But the recent years indicate that the integrity of these institutions is undermined, Roux said.
- SA’s young population
The country faces a serious challenge in providing young working age population with job opportunities.
“It will be terribly wrong if millions of young people fail to find work.”